Gadd45, a family member of the growth arrest and DNA damage-inducible gene family 45 (Gadd45), is strongly induced by interleukin-2 (IL-2) in peripheral T cells. While in most tissues all Gadd45 family members are expressed, Gadd45 is the only member that is induced by IL-2. Here we show that the IL-2-induced expression of Gadd45 is dependent on a signaling pathway mediated by the tyrosine kinase Jak3 and the transcription factors Stat5a and Stat5b (signal transducer and activator of transcription). Previous studies with ectopically overexpressed Gadd45 in various cell lines implicated its function in negative growth control. To analyze the physiological role of Gadd45 we used homologous recombination to generate mice lacking Gadd45. Gadd45-deficient mice develop normally, are indistinguishable from their littermates, and are fertile. Furthermore, hematopoiesis in mice lacking Gadd45 is not impaired and Gadd45-deficient T lymphocytes show normal responses to IL-2. These data demonstrate that Gadd45 is not essential for normal mouse development and hematopoiesis, possibly due to functional redundancy among the Gadd45 family members. Gadd45 is also dispensable for IL-2-induced T-cell proliferation.