Inflammation has been recognized increasingly as a critical pathologic component of a number of heart diseases. A mouse model of autoimmune myocarditis was developed to study the role of immune mediators in the development of cardiac dysfunction. We have found previously that IFN-gamma deficiency promotes inflammation in murine myocarditis. It has been unclear, however, how IFN-gamma deficiency in myocarditis affects cardiac function and what underlying immune mechanisms are responsible for these effects. In this work, we show that IFN-gamma knockout (KO) mice have more pronounced systolic and diastolic dysfunction and greater frequency of progression to dilated cardiomyopathy and heart failure compared with WT mice. Cardiac dysfunction in the KO mice is associated with the expansion of activated (CD44(high)) CD3+ T cells due to reduced apoptosis of CD4+, but not CD8+, T cells. CD4+ T cells in the KO mice show impaired up-regulation of CD25 upon activation, resulting in the expansion of CD4+CD44+CD25- T cells and their infiltration into the heart. CD4+CD25- T cells are less apoptosis-prone compared with the CD25+ population, and their infiltration into the heart is associated with greater severity of myocarditis. We conclude that IFN-gamma deficiency in autoimmune myocarditis is associated with preferential expansion of CD4+CD44+CD25- T cells resulting in increased cardiac inflammation. An exaggerated inflammatory response in IFN-gamma KO mice causes cardiac dysfunction, leading to dilated cardiomyopathy and heart failure.