Interleukin 17 (IL-17) plays critical roles in the pathogenesis of various autoimmune diseases, including experimental autoimmune encephalomyelitis (EAE). How the signals triggered by this powerful inflammatory cytokine are controlled to avoid abnormal inflammatory responses is not well understood. In this study, we report that TRAF3 is a receptor proximal negative regulator of IL-17 receptor (IL-17R) signaling. TRAF3 greatly suppressed IL-17-induced NF-κB and mitogen-activated protein kinase activation and subsequent production of inflammatory cytokines and chemokines. Mechanistically, the binding of TRAF3 to IL-17R interfered with the formation of the receptor signaling activation complex IL-17R-Act1-TRAF6, resulting in suppression of downstream signaling. TRAF3 markedly inhibited IL-17-induced expression of inflammatory cytokine and chemokine genes in vivo and consequently delayed the onset and greatly reduced the incidence and severity of EAE. Thus, TRAF3 is a negative regulator of IL-17R proximal signaling.