One of the key features of immune functional impairment with age is the progressive involution of the thymic tissue responsible for naive T cell production. In this study, we identify two major phases of thymic epithelial cell (TEC) loss during aging; a block in mature TEC differentiation from the pool of immature precursors, occurring at the onset of puberty, followed by impaired bipotent TEC progenitor differentiation, with depletion of Sca-1lo cTEC and mTEC lineage-specific precursors. We reveal the increased production of follistatin by aging TECs contributes to their own demise. This TEC loss occurs primarily through antagonism of activin A signaling, which we show is required for TEC maturation and acts in dissonance to Bmp4. Together, these results indicate that an imbalance of activin A and Bmp4 signaling underpins degeneration of postnatal TEC maintenance during aging, and its reversal enables transient replenishment of mature TECs.