Cdc42 of the Rho GTPase family has been implicated in cell actin organization, proliferation, survival, and migration but its physiological role is likely cell-type specific. By a T cell-specific deletion of Cdc42 in mouse, we have recently shown that Cdc42 maintains naïve T cell homeostasis through promoting cell survival and suppressing T cell activation. Here we have further investigated the involvement of Cdc42 in multiple stages of T cell differentiation. We found that in Cdc42(-/-) thymus, positive selection of CD4(+)CD8(+) double-positive thymocytes was defective, CD4(+) and CD8(+) single-positive thymocytes were impaired in migration and showed an increase in cell apoptosis triggered by anti-CD3/-CD28 antibodies, and thymocytes were hyporesponsive to anti-CD3/-CD28-induced cell proliferation and hyperresponsive to anti-CD3/-CD28-stimulated MAP kinase activation. At the periphery, Cdc42-deficient naive T cells displayed an impaired actin polymerization and TCR clustering during the formation of mature immunological synapse, and showed an enhanced differentiation to Th1 and CD8(+) effector and memory cells in vitro and in vivo. Finally, Cdc42(-/-) mice exhibited exacerbated liver damage in an induced autoimmune disease model. Collectively, these data establish that Cdc42 is critically involved in thymopoiesis and plays a restrictive role in effector and memory T cell differentiation and autoimmunity.