CD1d-restricted autoreactive natural killer (NK1.1+) T cells function as regulatory cells in various disease conditions. Using improved tetramer tracking methodology, we identified a NK1.1- thymic precursor and followed its differentiation and emigration to tissues by direct cell transfer and in situ cell labeling studies. A major lineage expansion occurred within the thymus after positive selection and before NK receptor expression. Surprisingly, cytokine analysis of the developmental intermediates between NK and NK+ stages showed a T helper cell TH2 to TH1 conversion, suggesting that the regulatory functions of NK T cells may be developmentally controlled. These findings characterize novel thymic and postthymic developmental pathways that expand autoreactive cells and differentiate them into regulatory cells.