Phospholipase Cgamma1 (PLCgamma1) is an important signaling effector of T cell receptor (TCR). To investigate the role of PLCgamma1 in T cell biology, we generated and examined mice with T cell-specific deletion of PLCgamma1. We demonstrate that PLCgamma1 deficiency affects positive and negative selection, significantly reduces single-positive thymocytes and peripheral T cells, and impairs TCR-induced proliferation and cytokine production, and the activation of ERK, JNK, AP-1, NFAT, and NF-kappaB. Importantly, PLCgamma1 deficiency impairs the development and function of FoxP3(+) regulatory T cells, causing inflammatory/autoimmune symptoms. Therefore, PLCgamma1 is essential for T cell development, activation, and tolerance.