The thymic natural regulatory T cell (Treg) compartment of NOD mice is unusual in having reduced TCR diversity despite normal cellularity. In this study, we show that this phenotype is attributable to perturbations in early and late stages of thymocyte development and is controlled, at least in part, by the NOD Idd9 region on chromosome 4. Progression from double negative 1 to double negative 2 stage thymocytes in NOD mice is inefficient; however, this defect is compensated by increased proliferation of natural Tregs (nTregs) within the single positive CD4 thymocyte compartment, accounting for recovery of cellularity accompanied by loss of TCR diversity. This region also underlies the known attenuation of ERK-MAPK signaling, which may preferentially disadvantage nTreg selection. Interestingly, the same genetic region also regulates the rate of thymic involution that is accelerated in NOD mice. These findings highlight further complexity in the control of nTreg repertoire diversity.