Transforming growth factor-beta (TGF-beta) has been implicated in the control of differentiation and proliferation of multiple cell types. However, a role for TGF-beta in the control of immune homeostasis is not fully understood because of its pleiotropic action. Here we report that complete ablation of the TGF-beta signaling in T cells engendered aggressive early-onset, multiorgan, autoimmune-associated lesions with 100% mortality. Peripheral CD4+ and CD8+ T cells with TGF-beta-receptor II (TGF-betaRII) deficiency activated cytolytic and T helper 1 (Th1) differentiation program in a cell-intrinsic T cell receptor (TCR)-specific fashion. Furthermore, TGF-betaRII deficiency blocked the development of canonical CD1d-restricted NKT cells. Instead, it facilitated generation of a highly pathogenic T cell subset exhibiting multiple hallmarks of NK cells and sharply elevated amounts of FasL, perforin, granzymes, and interferon-gamma. Thus, TGF-beta signaling in peripheral T cells is crucial in restraining TCR activation-dependent Th1, cytotoxic, and NK cell-like differentiation program which, when left unchecked, leads to rapidly progressing fatal autoimmunity.