Deficiencies in transmembrane activator and CAML interactor (TACI) result in common variable immune deficiency, a syndrome marked by recurrent infections with encapsulated microorganisms, impaired production of antibodies, and lymphoproliferation. How TACI promotes antibody production and inhibits lymphoproliferation is not understood. To answer this question, we studied the generation of immunity to protein antigens in both TACI-deficient and TACI-proficient mice. We show that TACI promotes sustained Blimp-1 expression by B cells responding to antigen, which in turn limits B-cell clonal expansion and facilitates differentiation of long-lived antibody-secreting cells. Short-term IgG secretion occurs independently of TACI as DNA double-strand breaks associated with isotype class switching induce Blimp-1 transiently, independently of TACI. Our results showing that TACI induces and maintains Blimp-1 provide, for the first time, a unified molecular and cellular mechanism explaining the primary features of common variable immune deficiency, exquisite vulnerability to infection with encapsulated organisms, lymphoproliferation, and hypogammaglobulinemia.