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Since its discovery in 2000, IL-21 has been shown to play critical roles in the regulation of both innate and adaptive immune responses. IL-21 is produced predominantly by multiple effector CD4+ T-cell types [T helper 17 (Th17), follicular helper T (TFH), and other activated CD4+ cells] and NKT cells. In addition to T cell receptor (TCR) signals, the production of IL-21 by activated CD4+ T cells is intricately regulated by various extrinsic factors and intrinsic molecules, such as IL-6, IL-21, ICOS, Stat3, IRF4, and Batf. Because IL-21 receptor (IL-21R) is broadly expressed on T, B, NK, and dentritic cells (DCs), IL-21 signaling via Jak-Stat and other pathways has direct pleiotropic effects on their proliferation, differentiation, and effector function. For instance, while Th17 and TFH cells produce IL-21, IL-21 also facilitates the development of these cells. IL-21–producing TFH cells are important for the generation and maintenance of germinal centers, and control the differentiation of germinal center B cells and immunoglobulin production. Thus, IL-21R deficiency or IL-21 neutralization with IL-21R-Fc fusion protein prevents B cell-mediated autoimmunity in lupus-prone BXSB.B6-Yaa+ or MRL-Faslpr mouse models, respectively. IL-21 also enhances expansion and cytotoxicity of CD8+ effector T cells. During chronic lymphocytic choriomeningitis viral infection, chronic IL-21 production by antigen-specific CD4+ T cells is needed to sustain CD8+ T cell function for viral control. IL-21 is also required for the development of T cell-mediated type 1 diabetes in NOD mice, possibly through sustaining effector T cell function in a similar manner. Recently, two papers have shown that IL-21R-Fc prevents both auto- and allo-immune responses after islet transplantation. A timely discussion is thus needed to address the immune actions of IL-21 as well as the therapeutic potential of targeting IL-21 in transplantation.