The transcription factor FOXN1 is essential for fetal thymic epithelial cell (TEC) differentiation and proliferation. Postnatally, Foxn1 levels vary widely between TEC subsets, from low/undetectable in putative TEC progenitors to highest in differentiated TEC subsets. Correct Foxn1 expression is required to maintain the postnatal microenvironment; premature down-regulation of Foxn1 causes a rapid involution-like phenotype, while transgenic over-expression can cause thymic hyperplasia and/or delayed involution. We investigated a K5.Foxn1 transgene that drives over-expression in TECs, but neither causes hyperplasia, nor delays or prevents aging-related involution. Similarly, this transgene cannot rescue thymus size in Foxn1lacZ/lacZmice that undergo premature involution due to reduced Foxn1 levels. However, K5.Foxn1 transgenics do maintain TEC differentiation and cortico-medullary organization with aging, both alone and in Foxn1lacZ/lacZ mice. Analysis of candidate TEC markers showed co-expression of progenitor and differentiation markers as well as increased proliferation in Plet-1+ TECs associated with Foxn1 expression. These results demonstrate that the functions of FOXN1 in promoting TEC proliferation and differentiation are separable and context-dependent, and suggest that modulating Foxn1 levels can regulate the balance of proliferation and differentiation in TEC progenitors.