During a search for genes that maintain T cell quiescence, we determined that Tob, a member of an anti-proliferative gene family, was highly expressed in anergic T cell clones. Tob was also expressed in unstimulated peripheral blood T lymphocytes and down-regulated during activation. Forced expression of Tob inhibited T cell proliferation and transcription of cytokines and cyclins. In contrast, suppression of Tob with an antisense oligonucleotide augmented CD3-mediated responses and abrogated the requirement of costimulation for maximal proliferation and cytokine secretion. Tob associated with Smad2 and Smad4 and enhanced Smad DNA-binding. The inhibitory effect of Tob on interleukin 2 (IL-2) transcription was not mediated by blockade of NFAT, AP-1 or NF-κB transactivation but by enhancement of Smad binding on the −105 negative regulatory element of the IL-2 promoter. Thus, T cell quiescence is an actively maintained phenotype that must be suppressed for T cell activation to occur.