The thymus is a primary lymphoid organ playing a crucial role in immune tolerance, by educating thymocytes through a selection mediated by thymic epithelial cells (TEC).  Recent advances in gene editing and immunotherapies have made in vitro generation of iPSC-derived T cells a crucial issue with promising therapeutic applications. Current state-of-the-art approaches often fail to accurately replicate the thymic niche, resulting in impaired T cell generation, particularly for CD4+ T cells. Here we address the production of functional iPSc-derived TECs expressing AIRE and able to support in vitro T cell generation. We designed a protocol allowing iPSc differentiation into thymic epithelial progenitors (TEP) through an unbiased multifactorial method based on optimal experimental design. Modulation of signalling pathways known to regulate embryonic thymus organogenesis resulted in the obtention of TEPs expressing typical thymic markers. We achieved TEP maturation into AIRE-expressing TECs by setting up a hydrogel-based 3D culture supplemented in RANK ligand, resulting in the formation of thymic organoids. To assess the functionality of the generated TECs, primary hematopoietic progenitors were cocultured in the organoids and showed significantly improved maturation in single-positive CD4 or CD8 T cells. Remarkably, our thymic organoid model show multilineage differentiation potential, with generation of distinct dendritic cells populations in addition to the T lineages. Thus, generation of functional TECs and thymic organoids offers a practical platform for the study of thymic cellular interactions and paves the road to future cellular therapies by producing mature thymic immune cells of clinical interest.