Acquisition of the anergy phenotype in T cells is blocked by inhibitors of protein synthesis and calcineurin activity, suggesting that anergic T cells may have a unique genetic program. Retroviral transduction of hemopoietic stem cells from TCR transgenic mice and subsequent reconstitution of syngeneic mice to express the E3 ubiquitin ligase, gene related to anergy in lymphocytes (GRAIL), or an enzymatically inactive form, H2N2 GRAIL, allowed analysis of the role of GRAIL in T cell anergy in vivo. Constitutive expression of GRAIL was sufficient to render naive CD4 T cells anergic, however, when the enzymatically inactive form H2N2 GRAIL was expressed, it functioned as a dominant negative of endogenous GRAIL and blocked the development of anergy. These data provide direct evidence that a biochemical pathway composed of GRAIL and/or GRAIL-interacting proteins is important in the development of the CD4 T cell anergic phenotype in vivo.