The thymus is a specialized organ that provides an inductive environment for the development of T cells from multipotent hematopoietic progenitors. Self-nonself discrimination plays a key role in inducing a productive immunity and in preventing autoimmune reactions. Tolerance represents a state of immunologic nonresponsiveness in the presence of a particular antigen. The immune system becomes tolerant to self-antigens through the two main processes, central and peripheral tolerance. Central tolerance takes place within the thymus and represents the mechanism by which T cells binding with high avidity self-antigens, which are potentially autoreactive, are eliminated through so-called negative selection. This process is mostly mediated by medullary thymic epithelia cells (mTECs) and medullary dendritic cells (DCs). A remarkable event in the process is the expression of tissue-specific antigens (TSA) by mTECs driven by the transcription factor autoimmune regulator (AIRE). Mutations in this gene result in autoimmune polyendocrinopathy candidiasis ectodermal dystrophy (APECED), a rare autosomal recessive disease (OMIM 240300). Thus far, this syndrome is the paradigm of a genetically determined failure of central tolerance and autoimmunty. Patients with APECED have a variable pattern of autoimmune reactions, involving different endocrine and nonendocrine organs. However, although APECED is a monogenic disorder, it is characterized by a wide variability of the clinical expression, thus implying a further role for disease-modifying genes and environmental factors in the pathogenesis. Studies on this polyreactive autoimmune syndrome contributed enormously to unraveling several issues of the molecular basis of autoimmunity. This review focuses on the developmental, functional, and molecular events governing central tolerance and on the clinical implication of its failure.