A critical process during thymic development of the T cell repertoire is the induction of self-tolerance. Tolerance in developing T cells is highly dependent on medullary thymic epithelial cells (mTEC), and mTEC development in turn requires signals from mature single-positive thymocytes, a bidirectional relationship termed thymus crosstalk. We show that CD28–CD80/86 and CD40–CD40L costimulatory interactions, which mediate negative selection and self-tolerance, upregulate expression of LTα, LTβ, and receptor activator for NF-κB in the thymus and are necessary for medullary development. Combined absence of CD28–CD80/86 and CD40–CD40L results in profound deficiency in mTEC development comparable to that observed in the absence of single-positive thymocytes. This requirement for costimulatory signaling is maintained even in a TCR transgenic model of high-affinity TCR–ligand interactions. CD4 thymocytes maturing in the altered thymic epithelial environment of CD40/CD80/86 knockout mice are highly autoreactive in vitro and are lethal in congenic adoptive transfer in vivo, demonstrating a critical role for these costimulatory pathways in self-tolerance as well as thymic epithelial development. These findings demonstrate that cooperativity between CD28–CD80/86 and CD40–CD40L pathways is required for normal medullary epithelium and for maintenance of self-tolerance in thymocyte development.