Schnurri (Shn) is a large zinc finger protein implicated in cell growth, signal transduction, and lymphocyte development. Vertebrates possess at least three Shn orthologues (Shn-1, Shn-2, and Shn-3), which appear to act within the bone morphogenetic protein, transforming growth factor beta, and activin signaling pathways. However, the physiological functions of the Shn proteins remain largely unknown. In Shn-2-deficient mice, mature peripheral T cells exhibited normal anti-T cell receptor-induced proliferation, although there was dramatic enhancement in the differentiation into T helper type (Th)2 cells and a marginal effect on Th1 cell differentiation. Shn-2-deficient developing Th2 cells showed constitutive activation of nuclear factor kappaB (NF-kappaB) and enhanced GATA3 induction. Shn-2 was able to compete with p50 NF-kappaB for binding to a consensus NF-kappaB motif and inhibit NF-kappaB-driven promoter activity. Thus, Shn-2 plays a crucial role in the control of Th2 cell differentiation by regulating NF-kappaB function.