Central tolerance prevents autoimmunity, but also limits T cell responses to potentially immunodominant tumor epitopes with limited expression in healthy tissues. In peripheral APCs, γ-IFN-inducible lysosomal thiol reductase (GILT) is critical for MHC class II-restricted presentation of disulfide bond-containing proteins, including the self-antigen and melanoma Ag tyrosinase-related protein 1 (TRP1). The role of GILT in thymic Ag processing and generation of central tolerance has not been investigated. We found that GILT enhanced the negative selection of TRP1-specific thymocytes in mice. GILT expression was enriched in thymic APCs capable of mediating deletion, namely medullary thymic epithelial cells (mTECs) and dendritic cells, whereas TRP1 expression was restricted solely to mTECs. GILT facilitated MHC class II-restricted presentation of endogenous TRP1 by pooled thymic APCs. Using bone marrow chimeras, GILT expression in thymic epithelial cells (TECs), but not hematopoietic cells, was sufficient for complete deletion of TRP1-specific thymocytes. An increased frequency of TRP1-specific regulatory T (Treg) cells was present in chimeras with increased deletion of TRP1-specific thymocytes. Only chimeras that lacked GILT in both TECs and hematopoietic cells had a high conventional T/Treg cell ratio and were protected from melanoma challenge. Thus, GILT expression in thymic APCs, and mTECs in particular, preferentially facilitates MHC class II-restricted presentation, negative selection, and increased Treg cells, resulting in a diminished antitumor response to a tissue-restricted, melanoma-associated self-antigen.