The function of NF-κB family members is controlled by multiple mechanisms including the transcriptional regulator Bcl-3, an atypical member of the IκB family. By using a murine model of conditional Bcl-3 overexpression specifically in T cells, we observed impairment in the development of Th2, Th1, and Th17 cells. High expression of Bcl-3 promoted CD4 T-cell survival, but at the same time suppressed proliferation in response to TCR stimulation, resulting in reduced CD4 T-cell expansion. As a consequence, T-cell-specific overexpression of Bcl-3 led to reduced inflammation in the small intestine of mice applied with anti-CD3 in a model of gut inflammation. Moreover, impaired Th17-cell development resulted in the resistance of Bcl-3 overexpressing mice to EAE, a mouse model of multiple sclerosis. Thus, we concluded that fine-tuning expression of Bcl-3 is needed for proper CD4 T-cell development and is required to sustain Th17-cell mediated pathology.