A functional immune system requires the selection of T lymphocytes expressing receptors that are major histocompatibility complex restricted but tolerant to self-antigens. This selection occurs predominantly in the thymus, where lymphocyte precursors first assemble a surface receptor. In this review we summarize the current state of the field regarding the natural ligands and molecular factors required for positive and negative selection and discuss a model for how these disparate outcomes can be signaled via the same receptor. We also discuss emerging data on the selection of regulatory T cells. Such cells require a high-affinity interaction with self-antigens, yet differentiate into regulatory cells instead of being eliminated.