Mice with targeted deletion of fibrinogen-like protein 2 (fgl2) spontaneously developed autoimmune glomerulonephritis with increasing age, as did wild-type recipients reconstituted with fgl2-/- bone marrow. These data implicate FGL2 as an important immunoregulatory molecule and led us to identify the underlying mechanisms. Deficiency of FGL2, produced by CD4+CD25+ regulatory T cells (Treg), resulted in increased T cell proliferation to lectins and alloantigens, Th 1 polarization, and increased numbers of Ab-producing B cells following immunization with T-independent Ags. Dendritic cells were more abundant in fgl2-/- mice and had increased expression of CD80 and MHCII following LPS stimulation. Treg cells were also more abundant in fgl2-/- mice, but their suppressive activity was significantly impaired. Ab to FGL2 completely inhibited Treg cell activity in vitro. FGL2 inhibited dendritic cell maturation and induced apoptosis of B cells through binding to the low-affinity FcgammaRIIB receptor. Collectively, these data suggest that FGL2 contributes to Treg cell activity and inhibits the development of autoimmune disease.