Conventional T cells are selected by peptide-MHC expressed by cortical epithelial cells in the thymus, and not by cortical thymocytes themselves that do not express MHC I or MHC II. Instead, cortical thymocytes express non-peptide presenting MHC molecules like CD1d and MR1, and promote the selection of PLZF+ iNKT and MAIT cells, respectively. Here, we report an inducible class-I transactivator mouse that enables the expression of peptide presenting MHC I molecules in different cell types. We show that MHC I expression in DP thymocytes leads to expansion of peptide specific PLZF+ innate-like (PIL) T cells. Akin to iNKT cells, PIL T cells differentiate into three functional effector subsets in the thymus, and are dependent on SAP signaling. We demonstrate that PIL and NKT cells compete for a narrow niche, suggesting that the absence of peptide-MHC on DP thymocytes facilitates selection of non-peptide specific lymphocytes.