Thymus transplantation has great clinical potential for treating immunological disorders, but the shortage of transplant donors limits the progress of this therapy. Human embryonic stem cells (hESCs) are promising cell sources for generating thymic epithelial cells. Here, we report a stepwise protocol to direct the differentiation of hESCs into thymic epithelial progenitor-like cells (TEPLCs) by mimicking thymus organogenesis with sequential regulation of Activin, retinoic acid, BMP, and WNT signals. The hESC-derived TEPLCs expressed the key thymic marker gene FOXN1 and could further develop in vivo into thymic epithelium expressing the functional thymic markers MHC II and AIRE upon transplantation. Moreover, the TEPLC-derived thymic epithelium could support mouse thymopoiesis in T-cell-deficient mice and promote human T cell generation in NOD/SCID mice engrafted with human hematopoietic stem cells (hHSCs). These findings could facilitate hESC-based replacement therapy and provide a valuable in vitro platform for studying human thymus organogenesis and regeneration.