Previously a novel gene was identified that encodes a glucocorticoid-induced leucine zipper (GILZ) whose expression is up-regulated by dexamethasone. This study analyzed the role of GILZ in the control of T-cell activation and its possible interaction with nuclear factor κB (NF-κB). Results indicate that GILZ inhibits both T-cell receptor (TCR)–induced interleukin-2/interleukin-2 receptor expression and NF-κB activity. In particular, GILZ inhibits NF-κB nuclear translocation and DNA binding due to a direct protein-to-protein interaction of GILZ with the NF-κB subunits. Moreover, GILZ-mediated modulation of TCR-induced responses is part of a circuit because TCR triggering down-regulates GILZ expression. These results identify a new molecular mechanism involved in the dexamethasone-induced regulation of NF-κB activity and T-cell activation.