STAT proteins are a family of latent cytoplasmic transcription factors that are activated by tyrosine phosphorylation in response to a variety of cytokines, growth factors, and hormones. Once activated, STAT proteins translocate into the nucleus and help coordinate gene transcription. One striking feature of STAT signaling is its rapid and transient activation and deactivation cycle, although the molecular mechanisms responsible for this remain poorly understood. Here, we report on a nuclear protein that contains both PDZ and LIM domains and that interacts with activated STAT4 molecules. We show that SLIM is an ubiquitin E3 ligase that acts on STAT proteins to cause their proteosome-mediated degradation and enhance their dephosphorylation. Overexpression of SLIM leads to impaired STAT1 and STAT4 activity due to reduced STAT protein levels, while SLIM-deficiency results in increased STAT expression and thus enhanced IFNgamma production by Th1 cells. These studies suggest that SLIM is a novel ubiquitin E3 ligase whose targets include STAT proteins.