Gadd45gamma, a family member of the growth arrest and DNA damage-inducible gene family 45 (Gadd45), is strongly induced by interleukin-2 (IL-2) in peripheral T cells. While in most tissues all Gadd45 family members are expressed, Gadd45gamma is the only member that is induced by IL-2. Here we show that the IL-2-induced expression of Gadd45gamma is dependent on a signaling pathway mediated by the tyrosine kinase Jak3 and the transcription factors Stat5a and Stat5b (signal transducer and activator of transcription). Previous studies with ectopically overexpressed Gadd45gamma in various cell lines implicated its function in negative growth control. To analyze the physiological role of Gadd45gamma we used homologous recombination to generate mice lacking Gadd45gamma. Gadd45gamma-deficient mice develop normally, are indistinguishable from their littermates, and are fertile. Furthermore, hematopoiesis in mice lacking Gadd45gamma is not impaired and Gadd45gamma-deficient T lymphocytes show normal responses to IL-2. These data demonstrate that Gadd45gamma is not essential for normal mouse development and hematopoiesis, possibly due to functional redundancy among the Gadd45 family members. Gadd45gamma is also dispensable for IL-2-induced T-cell proliferation.