The thymic epithelium forms specialized niches to enable thymocyte differentiation. While the common epithelial progenitor of medullary and cortical thymic epithelial cells (mTECs and cTECs) is well defined, early stages of mTEC lineage specification have remained elusive. Here, we utilized in vivo targeting of mTECs to resolve their differentiation pathways and to determine whether mTEC progenitors participate in thymocyte education. We found that mTECs descend from a lineage committed, podoplanin (PDPN)-expressing progenitor located at the cortico-medullary junction. PDPN(+) junctional TECs (jTECs) represent a distinct TEC population that builds the thymic medulla, but only partially supports negative selection and thymocyte differentiation. Moreover, conditional gene targeting revealed that abrogation of alternative NF-κB pathway signaling in the jTEC stage completely blocked mTEC development. Taken together, this study identifies jTECs as lineage-committed mTEC progenitors and shows that NF-κB-dependent progression of jTECs to mTECs is critical to secure central tolerance.