DR3 is a death domain-containing receptor that is upregulated during T cell activation and whose overexpression induces apoptosis and NF-κB activation in cell lines. Here we show that an endothelial cell-derived TNF-like factor, TL1A, is a ligand for DR3 and decoy receptor TR6/DcR3 and that its expression is inducible by TNF and IL-1α. TL1A induces NF-κB activation and apoptosis in DR3-expressing cell lines, while TR6-Fc protein antagonizes these signaling events. Interestingly, in T cells, TL1A acts as a costimulator that increases IL-2 responsiveness and secretion of proinflammatory cytokines both in vitro and in vivo. Our data suggest that interaction of TL1A with DR3 promotes T cell expansion during an immune response, whereas TR6 has an opposing effect.