Activation-induced cell death (AICD) plays an essential role in the contraction of activated T cells after eradication of pathogen. Fas (APO-1/CD95) is one of the key cell surface proteins that mediate AICD in CD4+ and CD8+ T cells. Despite its prime importance in cell death, regulation of Fas expression in T cells is poorly understood. Here we show that Cyclon, a newly identified cytokine-inducible protein, is induced in T cells on T-cell receptor ligation and important for immune homeostasis. Transgenic expression of Cyclon ameliorated autoimmune phenotype in mice lacking subunits of IL-2R. Transgenic expression of Cyclon markedly enhanced AICD through increased expression of Fas whose expression is essential for Cyclon action. Finally, we demonstrated that activated but not resting CD4+ T cells with targeted deletion of a Cyclon allele show reduced AICD and expression of Fas, indicating a critical role of Cyclon in Fas expression in activated T cells. We think that our data provide insight into expression regulation of Fas in T cells.