The ligand for the c-Kit receptor, KitL, exists as a membrane-associated (mKitL) and a soluble form (sKitL). KitL functions outside c-Kit activation have not been identified. We show that co-culture of c-Kit- and mKitL-expressing NIH3T3 cells results in signaling through mKitL: c-Kit-bound mKitL recruits calcium-modulating cyclophilin ligand (CAML) to selectively activate Akt, leading to CREB phosphorylation, mTOR pathway activation, and increased cell proliferation. Activation of mKitL in thymic vascular endothelial cells (VECs) induces mKitL- and Akt-dependent proliferation, and genetic ablation of mKitL in thymic VECs blocks their c-Kit responsiveness and proliferation during neonatal thymic expansion. Therefore, mKitL-c-Kit form a bi-directional signaling complex that acts in the developing thymus to coordinate thymic VEC and early thymic progenitor (ETP) expansion by simultaneously promoting ETP survival and VEC proliferation. This mechanism may be relevant to both normal tissues and malignant tumors that depend on KitL-c-Kit signaling for their proliferation.