Evidence has recently emerged that butyrophilins, which are members of the extended B7 family of co-stimulatory molecules, have diverse functions in the immune system. We found that the human and mouse genes encoding butyrophilin-2A2 (BTN2A2) are regulated by the class II trans-activator and regulatory factor X, two transcription factors dedicated to major histocompatibility complex class II expression, suggesting a role in T cell immunity. To address this, we generated Btn2a2-deficient mice. Btn2a2(-/-) mice exhibited enhanced effector CD4(+) and CD8(+) T cell responses, impaired CD4(+) regulatory T cell induction, potentiated antitumor responses, and exacerbated experimental autoimmune encephalomyelitis. Altered immune responses were attributed to Btn2a2 deficiency in antigen-presenting cells rather than T cells or nonhematopoietic cells. These results provide the first genetic evidence that BTN2A2 is a co-inhibitory molecule that modulates T cell-mediated immunity.