Glucocorticoid-induced TNF receptor family-related protein (GITR) is expressed on activated and regulatory T cells, but its role on these functionally opposing cell types is not fully understood. Here we describe that transgenic expression of GITR’s unique ligand (GITRL) induces a prominent increase of both effector and regulatory CD4+ T cells, but not CD8+ T cells. Regulatory T cells from GITRL transgenic mice are phenotypically activated and retain their suppressive capacity. The accumulation of effector and regulatory T cells is not due to enhanced differentiation of naive T cells, but is a direct result of increased proliferation. Functional consequences of increased numbers of both regulatory and effector T cells were tested in an autoimmune model and show that GITR stimulation is protective, as it significantly delays disease induction. These data indicate that GITR regulates the balance between regulatory and effector CD4+ T cells by enhancing proliferation of both populations in parallel.