Recognition of self-antigens is required for regulatory T (Treg) cells to exert dominant tolerance. However, the mechanism by which self-reactive thymocytes are diverted into the Treg cell subset is unclear. To address this question, we looked for the immediate precursors to Treg cells within Foxp3-CD4+CD8- thymocytes. By using intrathymic transfer, we found that the CD25hi subset is highly enriched in Treg cell precursors. This was supported by tracking of thymocyte development via analysis of T cell receptor (TCR) repertoires in a TCR-β transgenic model. These Treg cell precursors exist at a developmental stage where they are poised to express Foxp3 without further TCR engagement, requiring only stimulation by interleukin-2 (IL-2) or IL-15. Thus, we propose that the selection of self-reactive thymocytes into the Treg cell subset occurs via an instructive rather than stochastic-selective model whereby TCR signals result in the expression of proximal IL-2 signaling components facilitating cytokine-mediated induction of Foxp3.