TNF receptor-associated factor 1 (TRAF1) is a unique TRAF protein because it lacks a RING finger domain and is predominantly expressed in activated lymphocytes. To elucidate the function of TRAF1, we generated TRAF1-deficient mice. TRAF1^−/− mice are viable and have normal lymphocyte development. TRAF1^−/− T cells exhibit stronger than wild-type (WT) T cell proliferation to anti-CD3 mAb, which persisted in the presence of IL-2 or anti-CD28 antibodies. Activated TRAF1^−/− T cells, but not TRAF1^+/+ T cells, responded to TNF by proliferation and activation of the NF-κB and AP-1 signaling pathways. This TNF effect was mediated by TNFR2 (p75) but not by TNFR1 (p55). Furthermore, skin from TRAF1^−/− mice was hypersensitive to TNF-induced necrosis. These findings suggest that TRAF1 is a negative regulator of TNF signaling.