To study the effect of enhanced glucocorticoid signaling on T cells, we generated transgenic rats overexpressing a mutant glucocorticoid receptor with increased ligand affinity in the thymus. We found that this caused massive thymocyte apoptosis at physiological hormone levels, which could be reversed by adrenalectomy. Due to homeostatic proliferation, a considerable number of mature T lymphocytes accumulated in the periphery, responding normally to costimulation but exhibiting a perturbed T-cell repertoire. Furthermore, the transgenic rats showed increased resistance to experimental autoimmune encephalomyelitis, which manifests in a delayed onset and milder disease course, impaired leukocyte infiltration into the central nervous system and a distinct cytokine profile. In contrast, the ability of the transgenic rats to mount an allergic airway response to ovalbumin was not compromised, although isotype switching of antigen-specific immunoglobulins was altered. Collectively, our findings suggest that endogenous glucocorticoids impact T-cell development and favor the selection of Th2- over Th1-dominated adaptive immune responses.