The cytokine potential of developing T helper (Th) cells is directly shaped both positively and negatively by the cytokines expressed by the effector Th cell subsets. Here we find that the recently identified cytokine, interleukin (IL)-21, is preferentially expressed by Th2 cells when compared with Th1 cells generated in vitro and in vivo. Exposure of naive Th precursors to IL-21 inhibits interferon (IFN)-gamma production from developing Th1 cells. The repression of IFN-gamma production is specific in that the expression of other Th1 and Th2 cytokines is unaffected. IL-21 decreases the IL-12 responsiveness of developing Th cells by specifically reducing both signal transducer and activator of transcription 4 protein and mRNA expression. These results suggest that Th2 cell-derived IL-21 regulates the development of IFN-gamma-producing Th1 cells which could serve to amplify a Th2 response.