Cytotoxic T lymphocyte antigen‐4 (CTLA‐4) induces major inhibitory signals for T cell activation. From analyses of TCR‐transgenic (Tg) CTLA‐4‐deficient mice, it has been believed that CTLA‐4 does not affect thymocyte development. To focus upon the in vivo function of CTLA‐4 in thymocyte development from a different aspect, we have established Tg mice expressing either full‐length CTLA‐4 (FL‐Tg) or a mutant CTLA‐4 lacking the cytoplasmic region (truncated, TR‐Tg), and analyzed thymocyte development. TR‐T cells express much higher CTLA‐4 on the cell surface than FL‐T cells, in which most CTLA‐4 was localized in intracellular vesicles. While CTLA‐4–/– mice exhibit lymphoproliferative disease, neither of the Tg mice with CTLA‐4–/– background developed the disorder. Although the development of thymocytes appeared normal in both Tg mice, in vivo depletion of double‐positive thymocytes by injection of anti‐CD3 Ab as well as the elimination of minor lymphocyte‐stimulating antigen‐reactive thymocytes were impaired in FL‐Tg mice but not in TR‐Tg mice. Functionally, cross‐linking of CTLA‐4 on thymocytes from FL‐Tg mice, but not from TR‐Tg mice, inhibited proliferation. These results reveal a potential role of CTLA‐4, through its cytoplasmic domain, in the negative selection of thymocytes and in the prevention of lymphoproliferative disease.