The role of transforming growth factor-beta (TGF-beta) in inhibiting T cell functions has been studied with dominant-negative TGF-beta receptor transgenic models; however, the full impact of TGF-beta signaling on T cells and the mechanisms by which TGF-beta signals remain poorly understood. Here we show that mice with T cell-specific deletion of TGF-beta receptor II developed lethal inflammation associated with T cell activation and differentiation. In addition, TGF-beta signaling positively regulated T cell development and homeostasis. Development of CD8+ T cells and NKT cells, maintenance of peripheral Foxp3-expressing regulatory T cells, and survival of CD4+ T cells all depended on TGF-beta signaling. Both T helper 1 (Th1) differentiation and survival of activated CD4+ T cells required T-bet, the TGF-beta-regulated transcription factor, which controlled CD122 expression and IL-15 signaling in Th1 cells. This study reveals pleiotropic functions of TGF-beta signaling in T cells that may ensure a diverse and self-tolerant T cell repertoire in vivo.