Nedd4 and Itch are E3 ubiquitin ligases that, in vitro, ubiquitinate similar targets and thus are thought to function similarly. T cells lacking Itch show spontaneous activation and T helper type 2 (TH2) polarization. To test whether the loss of Nedd4 affects T cells in the same way, we generated Nedd4+/+ and Nedd4−/−fetal liver chimeras. Nedd4−/−T cells developed normally but proliferated less, produced less interleukin 2, and provided inadequate help to B cells. Nedd4−/−T cells contain increased amounts of Cbl-b protein, and Nedd4 was required for Cbl-b poly-ubquitination induced by CD28 co-stimulation. These data demonstrate that Nedd4 promotes the conversion of naive T cells into activated T cells. We propose that Nedd4 and Itch ubiquitinate distinct target proteins in vivo.