After activation, CD4⁺ helper T (T_H) cells differentiate into distinct effector subsets that are characterized by their unique cytokine expression and immunoregulatory function^,. During this differentiation, T_H1 and T_H2 cells produce interferon-γ and interleukin (IL)-4, respectively, as autocrine factors necessary for selective lineage commitment. A distinct T_H subset, termed T_HIL-17, T_H17 or inflammatory T_H (T_Hi), has been recently identified as a distinct T_H lineage mediating tissue inflammation^,. T_H17 differentiation is initiated by transforming growth factor-β and IL-6 (refs ) and reinforced by IL-23 (ref. ), in which signal transduction and activators of transcription (STAT)3 and retinoic acid receptor-related orphan receptor (ROR)-γ mediate the lineage specification^,,. T_H17 cells produce IL-17, IL-17F and IL-22, all of which regulate inflammatory responses by tissue cells but have no importance in T_H17 differentiation^,,,. Here we show that IL-21 is another cytokine highly expressed by mouse T_H17 cells. IL-21 is induced by IL-6 in activated T cells, a process that is dependent on STAT3 but not ROR-γ. IL-21 potently induces T_H17 differentiation and suppresses Foxp3 expression, which requires STAT3 and ROR-γ, which is encoded by Rorc. IL-21 deficiency impairs the generation of T_H17 cells and results in protection against experimental autoimmune encephalomyelitis. IL-21 is therefore an autocrine cytokine that is sufficient and necessary for T_H17 differentiation, and serves as a target for treating inflammatory diseases.