The microenvironment of the thymus fosters the generation of a diverse and self-tolerant T cell repertoire from a pool of essentially random specificities. Epithelial as well as mesenchymal cells contribute to the thymic stroma, but little is known about the factors that allow for communication between the two cells types that shape the thymic microenvironment. In this study, we investigated the role of bone morphogenetic protein (BMP) signaling in thymus development. Transgenic expression of the BMP antagonist Noggin in thymic epithelial cells under the control of a Foxn1 promoter in the mouse leads to dysplastic thymic lobes of drastically reduced size that are ectopically located in the neck at the level of the hyoid bone. Interestingly, the small number of thymocytes in these thymic lobes develops with normal kinetics and shows a wild-type phenotype. Organ initiation of the embryonic thymic anlage in these Noggin transgenic mice occurs as in wild-type mice, but the tight temporal and spatial regulation of BMP4 expression is abrogated in subsequent differentiation stages. We show that transgenic Noggin blocks BMP signaling in epithelial as well as mesenchymal cells of the thymic anlage. Our data demonstrate that BMP signaling is crucial for thymus development and that it is the thymic stroma rather than developing thymocytes that depends on BMP signals.