There are accumulating data to show that thymic epithelium expresses a remarkable array of molecules previously considered to be tissue-specific antigens, such as parathyroid hormone, thyroglobulin, insulin, and C-reactive protein. From an immunological perspective, this property of thymic epithelium would provide an ideal mechanism to effect central tolerance of epithelial-restricted antigens. However, from a mechanistic perspective, this phenomenon remains mysterious. Two explanations have been proposed. One invokes promiscuous gene expression by medullary thymic epithelial cells that would allow transient derepression of selected gene expression. The other proposes that the expression of tissue-restricted genes by thymic epithelium reflects alternate pathways of epithelial development by small numbers of cells to form a mosaic of different epithelial types within the thymus. Here we show thymic expression of lung-associated gene products by an organized epithelial 'organoid' with ultrastructural features of respiratory epithelium and present data suggesting that the thymus also contains structures that ultrastructurally and phenotypically resemble solitary thyroid follicles. Based on these data, it is proposed that some thymic epithelial progenitor cells resemble pharyngeal endoderm in terms of their developmental potential and that alternative differentiation fates taken by these cells serve to maintain the spectrum of epithelial 'self' in the thymus.