Costimulatory molecules on antigen-presenting cells (APCs) play an important role in T cell activation and expansion. However, little is known about the surface molecules involved in direct T-T cell interaction required for their activation and expansion. LIGHT, a newly discovered TNF superfamily member (TNFSF14), is expressed on activated T cells and immature dendritic cells. Here we demonstrate that blockade of LIGHT activity can reduce anti-CD3–mediated proliferation of purified T cells, suggesting that T cell–T cell interaction is essential for this proliferation. To test the in vivo activity of T cell–derived LIGHT in immune homeostasis and function, transgenic (Tg) mice expressing LIGHT in the T cell lineage were generated. LIGHT Tg mice have a significantly enlarged T cell compartment and a hyperactivated peripheral T cell population. LIGHT Tg mice spontaneously develop severe autoimmune disease manifested by splenomegaly, lymphadenopathy, glomerulonephritis, elevated autoantibodies, and severe infiltration of various peripheral tissues. Furthermore, the blockade of LIGHT activity ameliorates the severity of T cell–mediated diseases. Collectively, these findings establish a crucial role for this T cell–derived costimulatory ligand in T cell activation and expansion; moreover, the dysregulation of T cell–derived LIGHT leads to altered T cell homeostasis and autoimmune disease.