Glucocorticoids, acting through the glucocorticoid receptor, potently modulate immune function and are a mainstay of therapy for treatment of inflammatory conditions, autoimmune diseases, leukemias and lymphomas. Moreover, removal of systemic glucocorticoids, by adrenalectomy in animal models or adrenal insufficiency in humans, has shown that endogenous glucocorticoid production is required for regulation of physiologic immune responses. These effects have been attributed to suppression of cytokines, although the crucial cellular and molecular targets remain unknown. In addition, considerable controversy remains as to whether glucocorticoids are required for thymocyte development^,,,. To assess the role of the glucocorticoid receptor in immune system development and function, we generated T-cell-specific glucocorticoid receptor knockout mice. Here we show that the T-cell is a critical cellular target of glucocorticoid receptor signaling, as immune activation in these mice resulted in significant mortality. This lethal activation is rescued by cyclooxygenase-2 (COX-2) inhibition but not steroid administration or cytokine neutralization. These studies indicate that glucocorticoid receptor suppression of COX-2 is crucial for curtailing lethal immune activation, and suggest new therapeutic approaches for regulation of T-cell-mediated inflammatory diseases.