Invariant natural killer T (iNKT) cells comprise three major effector subsets (NKT1, NKT2 and NKT17) defined by distinct transcription factors and cytokine producing potential. However, the precise steps of their differentiation in the thymus and periphery have been controversial. We demonstrate here that the small proportion of thymic iNKT and mucosal associated invariant T (MAIT) cells that express CCR7 are at early stage of development and serve as multipotent progenitors giving rise to effector subsets within the thymus. In particular, amongst PLZF^hi iNKT cells, CCR7 and PD-1 distinguished multipotent progenitors from IL-4 producing NKT2 effectors. Using intra-thymic labeling and transfer, we also showed that CCR7⁺ iNKT cells emigrate from the thymus in a KLF2 dependent manner, and undergo further maturation after reaching the periphery. These and parabiosis studies showed that thymic NKT1 and NKT17 were largely resident—they were not derived from the peripheral pool and did not contribute to the peripheral pool.  Finally, each thymic iNKT effector subset produces distinct factors that influence T cell development. Our findings demonstrate how the thymus is both a source of iNKT progenitors and a unique site of tissue dependent effector cell differentiation.