Posttranscriptional machinery regulates inflammation and is associated with autoimmunity as well as tumorigenesis in collaboration with transcription factors. We previously identified the tumor suppressor gene transformed follicular lymphoma (TFL) on 6q25 in a patient with follicular lymphoma, which transformed into diffuse large B cell lymphoma. TFL families have a common RNase domain that governs macrophage-mediated inflammation. In human peripheral blood, TFL is dominantly expressed at the glycine- and tryptophan-rich cytoplasmic processing bodies of T lymphocytes, and it is persistently upregulated in activated T cells. To address its physiological role, we established TFL(-/-) mice in which TFL(-/-) lymphocytes proliferated more rapidly than TFL(+/+) upon stimulation with inappropriate cytokine secretion, including IL-2, IL-6, and IL-10. Moreover, TFL inhibited the synthesis of cytokines such as IL-2, IL-6, IL-10, TNF-α, and IL-17a by 3' untranslated region RNA degradation. Experimental autoimmune encephalitis induced in TFL(-/-) mice demonstrated persistent severe paralysis. CNS-infiltrated CD4(+) T cells in TFL(-/-) mice contained a higher proportion of Th17 cells than did those in TFL(+/+) mice during the resolution phase, and IL-17a mRNA levels were markedly increased in TFL(-/-) cells. These results suggest that TFL may play an important role in attenuating local inflammation by suppressing the infiltration of Th17 cells in the CNS during the resolution phase of experimental autoimmune encephalitis. TFL is a novel gradual and persistent posttranscriptional regulator, and the TFL-driven attenuation of excessive inflammation could contribute to recovery from T cell-mediated autoimmune diseases.