Helios is a zinc-finger protein belonging to the Ikaros family of transcriptional regulators. It is expressed, along with Ikaros, throughout early stages of thymocyte development where it quantitatively associates with Ikaros through C-terminal zinc-finger domains that mediate heterodimerization between Ikaros family members. To understand the role of Helios in T-cell development, we used a retroviral vector to express full-length Helios or a Helios isoform that lacked the N-terminal DNA-binding domain in hematopoietic progenitor cells of reconstituted mice. Constitutive expression of full-length Helios resulted in an inhibition of T-cell development at the double-negative stage within the thymus. Although expression of the DNA-binding mutant of Helios did not contribute to developmental abnormalities at early times after transplantation, 60% of animals that expressed the Helios DNA-binding mutant developed an aggressive and transplantable T-cell lymphoma 4 to 10 months after transplantation. These results demonstrate a vital function for Helios in maintaining normal homeostasis of developing T cells and formally show that non-DNA-binding isoforms of Helios are lymphomagenic if aberrantly expressed within the T-cell lineage.