T cell immunoglobulin and mucin domain–containing 3 (Tim-3) is an inhibitory receptor that is expressed on exhausted T cells during infection with HIV-1 and hepatitis C virus. By contrast, Tim-3 expression and function are defective in multiple human autoimmune diseases. However, the molecular mechanisms modulating Tim-3 function are not well understood. Here we show that human leukocyte antigen B (HLA-B)-associated transcript 3 (Bat3) binds to, and represses the function of, Tim-3. Bat3 protects T helper type 1 (TH1) cells from galectin-9–mediated cell death and promotes both proliferation and proinflammatory cytokine production. Bat3-deficient T cells have elevated expression of exhaustion-associated molecules such as Tim-3, Lag3, Prdm1 and Pbx3, and Bat3 knockdown in myelin-antigen–specific CD4+ T cells markedly inhibits the development of experimental autoimmune encephalomyelitis while promoting the expansion of a dysfunctional Tim-3hi, interferon-γ (IFN-γ)loCD4+ cell population. Furthermore, expression of Bat3 is reduced in exhausted Tim-3+ T cells from mouse tumors and HIV-1–infected individuals. These data indicate that Bat3 acts as an inhibitor of Tim-3–dependent exhaustion and cell death. Bat3 may thus represent a viable therapeutic target in autoimmune disorders, chronic infections and cancers.