NEDD8 (neural precursor cell expressed, developmentally down-regulated 8) is a ubiquitin-like molecule whose action on modifying protein substrates is critical in various cellular functions but whose importance in the immune system is not well understood. Here we investigated the role of protein neddylation in regulating T-cell function using an in vivo knockdown technique. We found that reduced expression of Ubc12 in CD4(+) T cells led to impaired T-cell receptor/CD28-induced proliferation and cytokine production both in vitro and in vivo, accompanied by reduced Erk activation. These findings were recapitulated by treatment with MLN4924, an inhibitor of NEDD8-activating enzyme. Furthermore, Shc, an adaptor molecule between antigen receptors and the Ras/Erk pathway, was identified as a target for neddylation. Importantly, mice adoptively transferred with Ubc12 knockdown CD4(+) T cells showed markedly ameliorated allergic responses. This study thus identifies an important role for protein neddylation in T-cell function, which may serve as a therapeutic target for inflammatory diseases.