The differentiation and activation of T cells are critically modulated by MAP kinases, which are in turn feed‐back regulated by dual‐specificity phosphatases (DUSPs) to determine the duration and magnitude of MAP kinase activation. DUSP4 (also known as MKP2) is a MAP kinase‐induced DUSP member that is dynamically expressed during thymocyte differentiation. We generated DUSP4‐deficient mice to study the function of DUSP4 in T‐cell development and activation. Our results show that thymocyte differentiation and activation‐induced MAP kinase phosphorylation were comparable between DUSP4‐deficient and WT mice. Interestingly, activated DUSP4−/− CD4+ T cells were hyperproliferative while DUSP4−/− CD8+ T cells proliferated normally. Further mechanistic studies suggested that the hyperproliferation of DUSP4−/− CD4+ T cells resulted from enhanced CD25 expression and IL‐2 signaling through increased STAT5 phosphorylation. Immunization of DUSP4−/− mice recapitulated the T‐cell hyperproliferation phenotype in antigen recall responses, while the profile of Th1/Th2‐polarized antibody production was not altered. Overall, these results suggest that other DUSPs may compensate for DUSP4 deficiency in T‐cell development, MAP kinase regulation, and Th1/Th2‐mediated antibody responses. More importantly, our data indicate that DUSP4 suppresses CD4+ T‐cell proliferation through novel regulations in STAT5 phosphorylation and IL‐2 signaling.