The role of β-catenin in thymocyte development has been extensively studied, however, the function of β-catenin in thymic epithelial cells (TECs) remains largely unclear. Here, we demonstrate a requirement for β-catenin in keratin 5 (K5)-expressing TECs, which comprise the majority of medullary TECs (mTECs) and a progenitor subset for cortical TECs (cTECs) in the young adult thymus. We found that conditionally ablated β-catenin in K5(+)-TECs and their progeny cells resulted in thymic atrophy. The composition of TECs was also aberrantly affected. Percentages of K5(hi)K8(+)-TECs, K5(+)K8(-)-TECs and UEA1(+)-mTECs were significantly decreased and the percentage of K5(lo)K8(+)-TECs and Ly51(+)-cTECs were increased in β-catenin-deficient thymi compared with that in the control thymi. We also observed that β-catenin-deficient TEC lineage could give rise to K8(+)-cTECs more efficiently than wild-type TECs using lineage-tracing approach. Importantly, the expression levels of several transcription factors (p63, FoxN1 and Aire), which are essential for TEC differentiation, were altered in β-catenin-deficient thymi. Under the aberrant differentiation of TECs, development of all thymocytes in β-catenin-deficient thymi was impaired. Interleukin-7 (IL-7) and chemokines (Ccl19, Ccl25 and Cxcl12) levels were also downregulated in the thymic stromal cells in the mutants. Finally, introducing a BCL2 transgene in lymphoid lineages, which has been shown to rescue IL-7-deficient thymopoiesis, partially rescued the thymic atrophy and thymocyte development defects caused by induced ablation of β-catenin in K5(+)-TECs. Collectively, these findings suggest that β-catenin is required for the differentiation of TECs, thereby contributing to thymocyte development in the postnatal thymus.