The NDFIP1 (neural precursor cell expressed, developmentally down-regulated protein 4 family-interacting protein 1) adapter for the ubiquitin ligase ITCH is genetically linked to human allergic and autoimmune disease, but the cellular mechanism by which these proteins enable foreign and self-antigens to be tolerated is unresolved. Here, we use two unique mouse strains--an Ndfip1-YFP reporter and an Ndfip1-deficient strain--to show that Ndfip1 is progressively induced during T-cell differentiation and activation in vivo and that its deficiency causes a cell-autonomous, Forkhead box P3-independent failure of peripheral CD4(+) T-cell tolerance to self and exogenous antigen. In small cohorts of antigen-specific CD4(+) cells responding in vivo, Ndfip1 was necessary for tolerogen-reactive T cells to exit cell cycle after one to five divisions and to abort Th2 effector differentiation, defining a step in peripheral tolerance that provides insights into the phenomenon of T-cell anergy in vivo and is distinct from the better understood process of Bcl2-interacting mediator of cell death-mediated apoptosis. Ndfip1 deficiency precipitated autoimmune pancreatic destruction and diabetes; however, this depended on a further accumulation of nontolerant anti-self T cells from strong stimulation by exogenous tolerogen. These findings illuminate a peripheral tolerance checkpoint that aborts T-cell clonal expansion against allergens and autoantigens and demonstrate how hypersensitive responses to environmental antigens may trigger autoimmunity.