Thymic dendritic cells (DCs) are suggested to be involved in T cell selection; however, their exact origin and function remain to be established. Although DCs in the adult thymus are mostly CD8alpha(+)CD11b(-), we found that CD8alpha(-)CD11b(+) DCs were abundantly present in the fetal thymus and they possessed antigen-presenting activity. Interestingly, these CD11b(+) DCs were significantly decreased in mice deficient for TNFR-associated factor 6 (TRAF6), a key signaling molecule downstream of IL-1 and tumor necrosis factor-alpha that have been known to induce DCs from intra-thymic precursor cells. CD11b(+) DCs were induced from CD4(-)CD8(-) thymocytes by fetal thymic epithelial cells (TECs). Analysis of cytokine expression in TECs revealed that none of the cytokines previously shown to induce DCs were expressed. Instead, we found strong expression of IL-18 that transmits signals through TRAF6. IL-18 induced CD11b(+) DCs from CD4(-)CD8(-) thymocytes in vitro, which exhibited strong antigen-presenting activity and formed conjugates with CD4(+)CD8(+) T cells efficiently. Taken together, these results strongly suggest that CD11b(+) DCs are differentiated from CD4(-)CD8(-) thymocytes by IL-18 produced from TECs and that they are involved in T cell selection in the fetal thymus.