After activation, CD4+ helper T (T(H)) cells differentiate into distinct effector subsets that are characterized by their unique cytokine expression and immunoregulatory function. During this differentiation, T(H)1 and T(H)2 cells produce interferon-gamma and interleukin (IL)-4, respectively, as autocrine factors necessary for selective lineage commitment. A distinct T(H) subset, termed T(HIL-17), T(H)17 or inflammatory T(H) (T(H)i), has been recently identified as a distinct T(H) lineage mediating tissue inflammation. T(H)17 differentiation is initiated by transforming growth factor-beta and IL-6 (refs 5-7) and reinforced by IL-23 (ref. 8), in which signal transduction and activators of transcription (STAT)3 and retinoic acid receptor-related orphan receptor (ROR)-gamma mediate the lineage specification. T(H)17 cells produce IL-17, IL-17F and IL-22, all of which regulate inflammatory responses by tissue cells but have no importance in T(H)17 differentiation. Here we show that IL-21 is another cytokine highly expressed by mouse T(H)17 cells. IL-21 is induced by IL-6 in activated T cells, a process that is dependent on STAT3 but not ROR-gamma. IL-21 potently induces T(H)17 differentiation and suppresses Foxp3 expression, which requires STAT3 and ROR-gamma, which is encoded by Rorc. IL-21 deficiency impairs the generation of T(H)17 cells and results in protection against experimental autoimmune encephalomyelitis. IL-21 is therefore an autocrine cytokine that is sufficient and necessary for T(H)17 differentiation, and serves as a target for treating inflammatory diseases.