Abstract Background Generation of functional CD4+CD8-CD25+ regulatory T cells (Treg) in the murine thymus depends on FoxP3. Removal of the thymus from neonatal mice has been shown to result in a multiple organ autoimmune disease phenotype that can be prevented by introducing the FoxP3+ Treg population to the animal. It has therefore, been proposed that functional FoxP3+ Treg cells are not made in the neonatal thymus; however, it remains unclear when and where functional FoxP3+CD4+CD8-CD25+ thymocytes are generated in postnatal thymus. Results We report that neither FoxP3 mRNA nor protein is expressed in CD4+CD8-CD25+, or CD4+CD8-CD25- thymocytes until 3–4 days post birth, despite the presence of mature CD4+CD8-CD25+/- thymocytes in the thymus by 1–2 days after birth. FoxP3-CD4+CD8-CD25+ thymocytes from day 2 newborn mice show no Treg activity. Interestingly, we are able to detect low numbers of FoxP3+ thymocytes dispersed throughout the medullary region of the thymus as early as 3–4 days post birth. Expression of FoxP3 is induced in embryonic day 17 fetal thymus organ culture (FTOC) after 4–6 days of in vitro culture. Treatment of FTOCs with thymic stromal derived lymphopoietin (TSLP) enhanced expression of FoxP3, and blocking the TSLP receptor reduces FoxP3 expression in FTOC. Furthermore, TSLP stimulates FoxP3 expression in purified CD4+CD8- thymocytes, but not in CD4+CD8+, CD4-CD8+ and CD4-CD8- thymocytes. Conclusion Expression of FoxP3 or Treg maturation is ontogenically distinct and kinetically delayed from the generation of CD4+CD8-CD25+ or CD4+CD8-CD25- thymocytes in the postnatal thymus. TSLP produced from medullary thymic epithelia cells (mTEC) contributes to the expression of FoxP3 and the maturation of natural regulatory T cells. Overall, these results suggest that the development of Treg cells requires paracrine signaling during late stages of thymocyte maturation that is distinct from signaling during positive or negative selection.