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 downregulation of Foxn1 causes a rapid involution-like phenotype, and transgenic overexpression can cause thymic hyperplasia and/or delayed involution. We investigated a K5.Foxn1 transgene that drives overexpression in mouse TECs, but causes neither hyperplasia nor delay or prevention of aging-related involution. Similarly, this transgene cannot rescue thymus size in Foxn1lacZ/lacZ mice, which undergo premature involution as a result of reduced Foxn1 levels. However, TEC differentiation and cortico-medullary organization are maintained with aging in both K5.Foxn1 and Foxn1lacZ/lacZ mice. Analysis of candidate TEC markers showed co-expression of progenitor and differentiation markers as well as increased proliferation in Plet1+ 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.