The introduction of the CTLA-4 recombinant fusion protein has demonstrated therapeutic effects by selectively modulating T-cell activation in rheumatoid arthritis. Here we show, using a forward genetic approach, that a mutation in the SH3gl1 gene encoding the endocytic protein Endophilin A2 is associated with the development of arthritis in rodents. Defective expression of SH3gl1 affects T cell effector functions and alters the activation threshold of autoreactive T cells, thereby leading to complete protection from chronic autoimmune inflammatory disease in both mice and rats. We further show that SH3GL1 regulates human T cell signaling and T cell receptor internalization, and its expression is upregulated in rheumatoid arthritis patients. Collectively our data identify SH3GL1 as a key regulator of T cell activation, and as a potential target for treatment of autoimmune diseases.