B cells are important in the development of autoimmune disorders by mechanisms involving dysregulated polyclonal B-cell activation, production of pathogenic antibodies, and co-stimulation of autoreactive T cells. zTNF4 (BLyS, BAFF, TALL-1, THANK) is a member of the tumour necrosis factor (TNF) ligand family that is a potent co-activator of B cells in vitro and in vivo. Here we identify two receptors for zTNF4 and demonstrate a relationship between zTNF4 and autoimmune disease. Transgenic animals overexpressing zTNF4 in lymphoid cells develop symptoms characteristic of systemic lupus erythaematosus (SLE) and expand a rare population of splenic B-Ia lymphocytes. In addition, circulating zTNF4 is more abundant in NZBWF1 and MRL-lpr/lpr mice during the onset and progression of SLE. We have identified two TNF receptor family members, TACI and BCMA, that bind zTNF4. Treatment of NZBWF1 mice with soluble TACI-Ig fusion protein inhibits the development of proteinuria and prolongs survival of the animals. These findings demonstrate the involvement of zTNF4 and its receptors in the development of SLE and identify TACI-Ig as a promising treatment of autoimmune disease in humans.