HLA-F adjacent transcript 10 (FAT10) is a cytokine-inducible ubiquitin-like modifier that is highly expressed in the thymus and directly targets FAT10-conjugated proteins for degradation by the proteasome. High expression of FAT10 in the mouse thymus could be assigned to strongly autoimmune regulator–expressing, mature medullary thymic epithelial cells, which play a pivotal role in negative selection of T cells. Also in the human thymus, FAT10 is localized in the medulla but not the cortex. TCR Vβ-segment screening revealed a changed T cell repertoire in FAT10-deficient mice. Analysis of five MHC class I– and II–restricted TCR-transgenic mice demonstrated an altered thymic negative selection in FAT10-deficient mice. Furthermore, the repertoire of peptides eluted from MHC class I molecules was influenced by FAT10 expression. Hence, we identified FAT10 as a novel modifier of thymic Ag presentation and epitope-dependent elimination of self-reactive T cells, which may explain why the fat10 gene could recently be linked to enhanced susceptibility to virus-triggered autoimmune diabetes.