This report addresses the role of gamma-chain cytokine signals in regulating CD4(+) T cell differentiation following activation. Using murine CD4(+) T cells lacking the Jak3 tyrosine kinase, we show that activation of these cells in the absence of gamma-chain-dependent cytokine signals induces an alternative pathway of T cell differentiation. Specifically, activated Jak3(-/-) CD4(+) T cells produce IL-10, TGF-beta, and IFN-gamma, but not IL-2 or IL-4, and are unable to proliferate in vitro. In addition, Jak3(-/-) CD4(+) T cells express high levels of programmed death-1 and lymphocyte activation gene-3 and modestly suppress the proliferation of wild-type CD4(+) T cells in coculture assays. Together, these features demonstrate a striking similarity between Jak3(-/-) CD4(+) T cells and the regulatory T cells that have been shown to suppress immune responses in vitro and in vivo. We conclude that Jak3 is a critical component of signaling pathways that regulate T cell differentiation into effector vs regulatory lineages.