Ly-GDI (lymphoid-specific guanosine diphosphate (GDP) dissociation inhibitor), also called D4-GDI, is preferentially expressed in hematopoietic tissues including bone marrow, thymus, spleen and lymph nodes. It binds to the small guanosine triphosphate (GTP)-binding protein Rho and inhibits GDP dissociation from Rho proteins. To explore the function of Ly-GDI in lymphocytes, we have generated Ly-GDI-deficient mice by gene targeting. These mice showed no striking abnormalities of lymphoid development or thymocyte selection. The mice also exhibited, for the most part, normal immune responses including lymphocyte proliferation, IL-2 production, cytotoxic T lymphocyte activity, antibody production, antigen processing and presentation, immune cell aggregation and migration, and protection against an intracellular protozoan. However, Ly-GDI-deficient mice exhibited deregulated T and B cell interactions after in vitro cultivation of mixed lymphocyte populations in concanavalin A (Con A) leading to overexpansion of B lymphocytes. Further studies revealed that Ly-GDI deficiency decreased IL-2 withdrawal apoptosis of lymph node cells while dexamethasone- and T cell receptor-induced apoptosis remained intact. These data implicate the regulation of the Rho GTPase by Ly-GDI in lymphocyte survival and responsiveness, but suggest that these functions may be partially complemented by other Rho regulatory proteins when the Ly-GDI protein is deficient.