Both inflammatory diseases and cancer are associated with heightened protein translation. However, the mechanisms of translational regulation and the roles of translation factors in these diseases are not clear. Programmed cell death 4 (PDCD4) is a newly described inhibitor of protein translation. To determine the roles of PDCD4 in vivo, we generated PDCD4-deficient mice by gene targeting. We report here that mice deficient in PDCD4 develop spontaneous lymphomas and have a significantly reduced life span. Most tumors are of the B lymphoid origin with frequent metastasis to liver and kidney. However, PDCD4-deficient mice are resistant to inflammatory diseases such as autoimmune encephalomyelitis and diabetes. Mechanistic studies reveal that upon activation, PDCD4-deficient lymphocytes preferentially produce cytokines that promote oncogenesis but inhibit inflammation. These results establish that PDCD4 controls lymphoma genesis and autoimmune inflammation by selectively inhibiting protein translation in the immune system.