Leflunomide, an inhibitor of de novo pyrimidine biosynthesis, has recently been introduced as a treatment for rheumatoid arthritis in an attempt to ameliorate inflammation by inhibiting lymphocyte activation. Although the immunosuppressive ability of leflunomide has been well described in several experimental animal models, the precise effects of a limited pyrimidine supply on T cell differentiation and effector functions have not been elucidated. We investigated the impact of restricted pyrimidine biosynthesis on the activation and differentiation of CD4 T cells in vivo and in vitro. Decreased activation of memory CD4 T cells in the presence of leflunomide resulted in impaired generation and outgrowth of Th1 effectors without an alteration of Th2 cell activation. Moreover, priming of naive T cells in the presence of leflunomide promoted Th2 differentiation from uncommitted precursors in vitro and enhanced Th2 effector functions in vivo, as indicated by an increase in Ag-specific Th2 cells and in the Th2-dependent Ag-specific Ig responses (IgG1) in immunized mice. The effects of leflunomide on T cell proliferation and differentiation could be antagonized by exogenous UTP, suggesting that they were related to a profound inhibition of de novo pyrimidine biosynthesis. These results indicate that leflunomide might exert its anti-inflammatory activities in the treatment of autoimmune diseases by preventing the generation of proinflammatory Th1 effectors and promoting Th2 cell differentiation. Moreover, the results further suggest that differentiation of CD4 T cells can be regulated at the level of nucleotide biosynthesis.