T cell activation through the T cell receptor (TCR) is subsequently modified by secondary signals that are either stimulatory or inhibitory. We show that CEACAM1 adhesion molecule isoforms containing a long cytoplasmic domain inhibited multiple T cell functions as a consequence of TCR ligation. Overexpression of CEACAM1 resulted in decreased proliferation, allogeneic reactivity, and cytokine production in vitro and delayed type hypersensitivity and inflammatory bowel disease in mouse models in vivo. Conditioned deletion of CEACAM1 in T cells caused increased TCR-CD3 complex signaling. This T cell regulation was dependent upon the presence of immunoreceptor tyrosine-based inhibition motifs (ITIM) within the cytoplasmic domain of CEACAM1 and the Src homology 2 domain-containing protein tyrosine-phosphatase 1 (SHP1) in the T cell. Thus, CEACAM1 overexpression or deletion in T cells resulted in T cell inhibition or activation, respectively, revealing a role for CEACAM1 as a class of inhibitory receptors potentially amenable to therapeutic manipulation.