T lymphocyte activation is highlighted by the induction of interleukin-2 (IL-2) gene expression, which governs much of the early lymphocyte proliferation responses. Peroxisome proliferator-activated receptor-gamma (PPARgamma) is a member of the nuclear receptor superfamily of ligand-activated transcription factors. PPARgamma mRNA expression was found in human peripheral blood T lymphocytes, raising the possibility of PPARgamma involvement in the regulation of T cell function. Here we show that PPARgamma ligands, troglitazone and 15-deoxy-Delta(12,14) prostaglandin J(2), but not PPARalpha agonist Wy14643, inhibited IL-2 production and phytohemagglutinin-inducible proliferation in human peripheral blood T-cells in a dose-dependent manner. This inhibitory effect on IL-2 was restricted to the PPARgamma2-expressing, not the PPARgamma-lacking, subpopulation of transfected Jurkat cells. The activated PPARgamma physically associates with transcriptional factor NFAT regulating the IL-2 promoter, blocking NFAT DNA binding and transcriptional activity. This interaction with T-cell-specific transcription factors indicates an important immunomodulatory role for PPARgamma in T lymphocytes and could suggest a previously unrecognized clinical potential for PPARgamma ligands as immunotherapeutic drugs to treat T-cell-mediated diseases by targeting IL-2 gene expression.