The NF-AT family of transcription factors activates early immune response genes such as cytokines. In the adult, NF-ATc is expressed exclusively in the lymphoid system and is induced upon lymphocyte activation. NF-ATc null mutant mice die in utero of cardiac failure, precluding analysis of the role of NF-ATc in lymphocyte activation. By using RAG-2-deficient blastocyst complementation, we now demonstrate that young, highly chimeric mice lacking NF-ATc have impaired repopulation of both thymus and peripheral lymphoid organs. Furthermore, NF-ATc deficiency impaired T lymphocyte activation and secretion of IL-4. B lymphocytes displayed reduced proliferation and a selective loss of IL-4-driven immunoglobulin isotypes both in vivo and in vitro. Our data demonstrate that NF-ATc is essential for the optimal generation and function of mature T and B lineage cells, with an especially profound effect on IL-4-driven responses.