A variant of the PTPN22 gene, 1858C/T, is associated with an increased risk for the development of a wide array of autoimmune disorders. It is known that the protein tyrosine phosphatase Lyp encoded by this gene has an inhibitory effect on the proximal TCR signaling pathways. However, the consequences of carrying this variant and the mechanism by which it contributes to the development of autoimmunity are poorly understood. In this study, we demonstrate that homozygosity for this variant results in a profound deficit in T cell responsiveness to Ag stimulation. Heterozygosity for the variant allele is associated with reduced responsiveness of CD4+ memory T cells, characterized by diminished calcium mobilization, expression of CD25, and IL-10 production upon TCR stimulation. Additionally, the presence of the variant allele is associated with an increase in circulating memory T cells. We further demonstrate that these effects are not limited to the T cell compartment. Individuals with the variant allele have fewer memory B cells and these cells display a reduced response to stimulation via the BCR indicative of a B cell intrinsic defect. By identifying an immunologic phenotype in healthy subjects which correlates with the PTPN22 1858C/T genotype, we can now explore specific hypotheses regarding pathogenesis of diseases associated with the PTPN22 1858T variant.