Suppressor of cytokine signaling 1 (Socs1) is critical for the regulation of interferon-γ responses and T cell homeostasis. Although the presentation of the inflammatory disease of Socs1-deficient mice is complex, we have tested here the hypothesis that it originates from inappropriate T cell development and the appearance of autoreactive T cells. Socs1-deficient T cell receptor–transgenic mice showed severely impaired positive selection and a substantial alteration in CD4-CD8 T cell fate specification. These defects were dependent on interferon-γ. Moreover, negative selection was also impaired, suggesting that autoimmunity contributes to the disease observed in Socs1^−/− mice. We conclude that the constitutive expression of Socs1 in the thymus protects the process of thymic development and selection from the effects of systemic inflammation.