Depending on the nature of the costimulation of T lymphocytes, expression of regulatory cytokines and chemokines is either susceptible or resistant to cyclic AMP (cAMP)-mediated inhibition. Our data show that cAMP-mediated inhibition of endogenously expressed cytokines, which is characteristic for T helper (Th) 1- and Th 2-like phenotypes, correlates with the induction of a potent transcriptional repressor, inducible cAMP early repressor (ICER), in both subsets of T cells activated under conditions of suboptimal interleukin-2 (IL-2) expression. Importantly, Th-specific expression of certain chemokines is also susceptible to cAMP-mediated transcriptional attenuation. To determine whether ICER per se, rather than forskolin-mediated elevation of intracellular cAMP, is responsible for the observed inhibitory effect, we generated transgenic mice expressing ICER under the control of a lymphocyte-specific lck promoter. On stimulation, transgenic thymocytes overexpressing ICER exhibited reduced levels of IL-2 and interferon (IFN)-gamma and failed to express the macrophage inflammatory protein (MIP)-1alpha and MIP-1beta genes. Splenic T cells from ICER-transgenic mice showed a defect in proliferation and lacked a mixed lymphocyte reaction response, implying that ICER-mediated inhibition of cytokine and chemokine expression might play an important role in T-cell inactivation.