Interleukin (IL) 17-producing T helper (Th17) cells play critical roles in the clearance of extracellular bacteria and fungi as well as the pathogenesis of various autoimmune diseases, such as multiple sclerosis, psoriasis, and ulcerative colitis. Although a global transcriptional regulatory network of Th17 cell differentiation has been mapped recently, the participation of epigenetic modifications in the differentiation process has yet to be elucidated. We demonstrated here that histone H3 lysine-27 (H3K27) demethylation, predominantly mediated by the H3K27 demethylase Jmjd3, crucially regulated Th17 cell differentiation. Activation of naïve CD4+ T cells immediately induced high expression of Jmjd3. Genetic depletion of Jmjd3 in CD4+ T cells specifically impaired Th17 cell differentiation both in vitro and in vivo. Ectopic expression of Jmjd3 largely rescued the impaired differentiation of Th17 cells in vitro in Jmjd3-deficient CD4+ T cells. Importantly, Jmjd3-deficient mice were resistant to the induction of experimental autoimmune encephalomyelitis (EAE). Furthermore, inhibition of the H3K27 demethylase activity with the specific inhibitor GSK-J4 dramatically suppressed Th17 cell differentiation in vitro. At the molecular level, Jmjd3 directly bound to and reduced the level of H3K27 trimethylation (me3) at the genomic sites of Rorc, which encodes the master Th17 transcription factor Rorγt, and Th17 cytokine genes such as Il17, Il17f, and Il22. Therefore, our studies established a critical role of Jmjd3-mediated H3K27 demethylation in Th17 cell differentiation and suggest that Jmjd3 can be a novel therapeutic target for suppressing autoimmune responses.