The generation of regulatory T (T(Reg)) cells in the thymus is crucial for immune homeostasis and self-tolerance. Recent discoveries have revealed the cellular and molecular mechanisms that govern the differentiation of a subset of developing thymocytes into natural T(Reg) cells. Several models, centred on the self-reactivity of the T cell receptor (TCR), have been proposed to explain the generation of a T(Reg) cell population that is cognizant of self. Several molecular pathways link TCR and cytokine signalling with the expression of the T(Reg) cell-associated transcription factor forkhead box P3 (FOXP3). Moreover, interplay between thymocytes and thymic antigen-presenting cells is also involved in T(Reg) cell generation.