Thymic epithelium provides an essential cellular substrate for T cell development and selection. Gradual age-associated thymic atrophy leads to a reduction in functional thymic tissue and a decline in de novo T cell generation. Development of strategies tailored toward regeneration of thymic tissue provides an important possibility to improve immune function in elderly individuals and increase the capacity for immune recovery in patients having undergone bone marrow transfer following immunoablative therapies. In this study we show that restriction of the size of the functional thymic epithelial progenitor pool affects the number of mature thymic epithelial cells. Using an embryo fusion chimera-based approach, we demonstrate a reduction in the total number of both embryonic and adult thymic epithelium, which relates to the initial size of the progenitor cell pool. The inability of thymic epithelial progenitor cells to undergo sufficient compensatory proliferation to rescue the deficit in progenitor numbers suggests that in addition to extrinsic regulation of thymus growth by provision of growth factors, intrinsic factors such as a proliferative restriction of thymic epithelial progenitors and availability of progenitor cell niches may limit thymic epithelial recovery. Collectively, our data demonstrate an important level of regulation of thymic growth and recovery at the thymic epithelial progenitor level, providing an important consideration for developing methods targeted toward inducing thymic regeneration.