Nuclear factor of activated T cells (NFAT) is a family of four related transcription factors implicated in cytokine and early response gene expression in activated lymphocytes. Here we report that NFAT4, in contrast to NFATp and NFATc, is preferentially expressed in DP thymocytes. Mice lacking NFAT4 have impaired development of CD4 and CD8 SP thymocytes and peripheral T cells as well as hyperactivation of peripheral T cells. The thymic defect is characterized by increased apoptosis of DP thymocytes. The increased apoptosis and hyperactivation may reflect heightened sensitivity to TcR-mediated signaling. Further, mice lacking NFAT4 have impaired production of Bcl-2 mRNA and protein. NFAT4 thus plays an important role in the successful generation and survival of T cells.