The nuclear factor of activated T cells (NFAT) is a member of the REL family of transcription factors that is involved in regulating transcription of proinflammatory genes, including IL-2 and TNF-α. Calcineurin-mediated dephosphorylation promotes translocation of NFAT proteins into the nucleus, where they bind specific elements within target gene promoters, in many cases through association with other transcription factors such as AP-1, NFκB, MEF-2, and PPARγ. Molecules that interfere with this signaling pathway have potential to be effective in regulating immunosuppressive and anti-inflammatory responses. NFAT inhibitor is a cell-permeable compound that selectively inhibits calcineurin-mediated dephosphorylation of NFAT. At 100 μM, this inhibitor effectively blocks calcineurin binding to NFAT without disrupting other calcineurin-dependent pathways, unlike the immunosuppressants cyclosporin A and FK506 which indiscriminately block all calcineurin phosphatase activity. NFAT inhibitor can disrupt NFAT-dependent expression of IL-2 and TNF-α when transfected in Jurak T cells and can prevent the activation and proliferation of T cells both in vitro (~ 43% at 1 μM using mixed lymphocyte cultures) and in vivo (10 mg/kg using C3H/HeN mice).