The thymus provides a specialized site for the production of T cells capable of recognizing foreign antigens in the context of self-major histocompatibility complex (MHC) molecules. During development, the thymus arises from an epithelial rudiment containing bipotent progenitors that differentiate into distinct cortical and medullary epithelial cells to regulate the maturation and selection of self-tolerant CD4(+) and CD8(+) T cells. In addition to their differentiation, thymic epithelial cells undergo cellular expansion to ensure that sufficient intrathymic cellular niches are available to support the large number of immature thymocytes required to form a self-tolerant T-cell pool. Thus, intrathymic T-cell production is intimately linked to the formation and availability of niches within thymic microenvironments. Here, we show the increase in intrathymic niches caused by the proliferation of the epithelium in the developing thymus is temporally regulated, and correlates with the presence of a population of fetal thymic mesenchyme defined by platelet derived growth factor receptor alpha (PDGFR alpha) expression. Depletion of PDGFR alpha(+) mesenchyme from embryonic thymi prior to their transplantation to ectopic sites results in the formation of functional yet hypoplastic thymic tissue. In summary, we highlight a specialized role for PDGFR alpha+ fetal mesenchyme in the thymus by determining availability of thymic niches through the regulation of thymic epithelial proliferation.