CD69 is induced after activation of leukocytes at inflammatory sites, but its physiological role during inflammation remains unknown. We explored the role of CD69 in autoimmune reactivity by analyzing a model of collagen-induced arthritis (CIA) in WT and CD69-deficient mice. CD69-/- mice showed higher incidence and severity of CIA, with exacerbated T and B cell immune responses to type II collagen. Levels of TGF-beta1 and TGF-beta2, which act as protective agents in CIA, were reduced in CD69-/- mice inflammatory foci, correlating with the increase in the proinflammatory cytokines IL-1beta and RANTES. Local injection of blocking anti-TGF-beta antibodies increased CIA severity and proinflammatory cytokine mRNA levels in CD69+/+ but not in CD69-/- mice. Moreover, in vitro engagement of CD69 induced total and active TGF-beta1 production in Concanavalin A-activated splenocyte subsets, mouse and human synovial leukocytes, and Jurkat stable transfectants of human CD69 but not in the parental CD69 negative cell line. Our results show that CD69 is a negative modulator of autoimmune reactivity and inflammation through the synthesis of TGF-beta, a cytokine that in turn downregulates the production of various proinflammatory mediators.