In this study, we demonstrate that the E3 ubiquitin ligase gene related to anergy in lymphocytes (GRAIL) is expressed in quiescent naive mouse and human CD4 T cells and has a functional role in inhibiting naive T cell proliferation. Following TCR engagement, CD28 costimulation results in the expression of IL-2 whose signaling through its receptor activates the Akt-mammalian target of rapamycin (mTOR) pathway. Activation of mTOR allows selective mRNA translation, including the epistatic regulator of GRAIL, Otubain-1 (Otub1), whose expression results in the degradation of GRAIL and allows T cell proliferation. The activation of mTOR appears to be the critical component of IL-2R signaling regulating GRAIL expression. CTLA4-Ig treatment blocks CD28 costimulation and resultant IL-2 expression, whereas rapamycin and anti-IL-2 treatment block mTOR activation downstream of IL-2R signaling. Thus, all three of these biotherapeutics inhibit mTOR-dependent translation of mRNA transcripts, resulting in blockade of Otub1 expression, maintenance of GRAIL, and inhibition of CD4 T cell proliferation. These observations provide a mechanistic pathway sequentially linking CD28 costimulation, IL-2R signaling, and mTOR activation as important requirements for naive CD4 T cell proliferation through the regulation of Otub1 and GRAIL expression. Our findings also extend the role of GRAIL beyond anergy induction and maintenance, suggesting that endogenous GRAIL regulates general cell cycle and proliferation of primary naive CD4 T cells.