Thymic epithelial cells (TECs) help orchestrate thymopoiesis, and TEC differentiation relies on bidirectional interactions with thymocytes. Although the molecular mediators that stimulate medullary thymic epithelial cell (mTEC) maturation are partially elucidated, the signals that regulate cortical thymic epithelial cell (cTEC) homeostasis remain elusive. Using IL-7 reporter mice, we show that TECs coexpressing high levels of IL-7 (Il7YFP+ TECs) reside within a subset of CD205+Ly51+CD40low cTECs that coexpresses Dll4, Ccl25, Ccrl1, Ctsl, Psmb11, and Prss16 and segregates from CD80+CD40high mTECs expressing Tnfrsf11a, Ctss, and Aire. As the frequency of Il7YFP+ TECs gradually declines as mTEC development unfolds, we explored the relationship between Il7YFP+ TECs and mTECs. In thymic organotypic cultures, the thymocyte-induced reduction in Il7YFP+ TECs dissociates from the receptor activator of NF-κB–mediated differentiation of CD80+ mTECs. Still, Il7YFP+ TECs can generate some CD80+ mTECs in a stepwise differentiation process via YFP−Ly51lowCD80low intermediates. Il7YFP+ TECs are sustained in Rag2−/− mice, even following in vivo anti-CD3ε treatment that mimics the process of pre-TCR β-selection of thymocytes to the double positive (DP) stage. Using Marilyn-Rag2−/− TCR transgenic, we find that positive selection into the CD4 lineage moderately reduces the frequency of Il7YFP+ TECs, whereas negative selection provokes a striking loss of Il7YFP+ TECs. These results imply that the strength of MHC/peptide–TCR interactions between TECs and thymocytes during selection constitutes a novel rheostat that controls the maintenance of IL-7–expressing cTECs.