Transcription factors of the NFAT family play a critical role in the immune response by activating the expression of cytokines and other inducible genes in antigen-stimulated cells. Here we show that a member of this family, NFAT1, is involved in down-regulating the late phase of IL-4 gene transcription, thus inhibiting T helper 2 responses. Whereas stimulated T cells from wild-type mice show a transient increase and then a rapid decline in the steady-state levels of IL-4 mRNA in vitro, the levels of IL-4 gene transcripts in NFAT1-deficient T cells are maintained at high levels under the same conditions. Consistent with this observation, NFAT1-/- mice are more susceptible to infection with Leishmania major. This report provides evidence that NFAT proteins regulate not only the initiation but also the termination of gene transcription.