Downstream Regulatory Element Antagonist Modulator (DREAM) is a Ca(2+)-dependent transcriptional repressor expressed in the brain, thyroid gland and thymus. Here, we analyzed the function of DREAM and the related protein KChIP-2 in the immune system using transgenic (tg) mice expressing a cross-dominant active mutant (EFmDREAM) for DREAM and KChIPs Ca(2+)-dependent transcriptional derepression. EFmDREAM tg mice showed reduced T-cell proliferation. Tg T cells exhibited decreased interleukin (IL)-2, -4 and interferon (IFN)gamma production after polyclonal activation and following antigen-specific response. Chromatin immunoprecipitation and transfection assays showed that DREAM binds to and represses transcription from these cytokine promoters. Importantly, specific transient knockdown of DREAM or KChIP-2 induced basal expression of IL-2 and IFNgamma in wild-type splenocytes. These data propose DREAM and KChIP-2 as Ca(2+)-dependent repressors of the immune response.