IL-27, an IL-12 family cytokine, has pleiotropic functions in the differentiation and expansion of CD4+ T cell subsets. Here, we discovered a novel function of IL-27. CD4+CD45RBhigh T cells from mice deficient for the α chain of IL-27 receptor failed to induce colitis in Rag−/− recipients, because of an inability of activated donor cells to survive. Interestingly, IL-27 was indispensable for prevention of colitis by regulatory T cells, also because of a defect in long-term cell survival. IL-27 affected the survival of activated T lymphocytes, rather than promoting cell proliferation, by inhibiting Fas-mediated activation-induced T cell death, acting through the STAT3 signaling pathway. The addition of IL-27 during activation resulted in an increased cell number, which was correlated with decreased activation of both caspases 3 and 8. This pro-survival effect was attributed to downregulation of FasL, as well as to the induction of the anti-apoptotic protein cFLIP. While activation induced cell death is an important mechanism for the maintenance of immunological homeostasis, protection of lymphocytes from excessive cell death is essential for effective immunity. Our data indicate that IL-27 plays a crucial role in the inhibition of activation-induced cell death, thereby permitting antigen-driven T cell expansion.