How many T cells undergo negative selection in a normal thymus, and at which stage(s) of T cell development does this occur? Addressing this question has been difficult due to a lack of molecular markers that distinguish thymocytes undergoing positive versus negative selection. We found that expression of the transcription factor, HELIOS, is induced during negative selection but decreases during positive selection of thymocytes. Surprisingly, most negative selection occurs before the T cells have acquired the CCR7 receptor for homing to the thymic medulla for a second wave of negative selection. Strongly self-reactive T cells mount two very different response programs at the first and second wave of negative selection: only at the second wave is there a parallel activation of the TCR-NFκB response, which opposes Bim-mediated apoptosis and activates genes essential for a subset of negatively selecting T cells to be diverted into Foxp3+ T-reg differentiation. The divergent phenotypes of wave 1 and wave 2 negatively selected thymocytes are conserved in humans and mice, highlighting mice as excellent tools to delineate mechanisms underlying the two “waves”. Despite being associated predominantly with the thymic medulla, the AIRE transcription factor and bone marrow-derived antigen presenting cells (APC) each play substantial roles in negatively selecting wave 1 thymocytes, presumably located in the thymic cortex. Intercellular transfer and medulla-to-cortex carriage of self-antigen may explain this observation as bone marrow-derived APCs can, and in one case are required to, present an Aire-dependent self-antigen to thymocytes. Furthermore, the same Aire-dependent self-antigen induces negative selection in wave 1 or wave 2 when it is expressed at high or low levels, respectively. These data reveal distinctions in the stage, extent, molecular nature and APC subsets required in two major waves of T cell negative selection in the normal thymus.