The fate of developing T cells is determined by the strength of T cell receptor (TCR) signal they receive in the thymus. This process is finely regulated through the tuning of positive and negative regulators in thymocytes. The Family with sequence similarity 49 member B (Fam49b) protein is a newly discovered negative regulator of TCR signaling that has been shown to suppress Rac-1 activity in vitro in cultured T cell lines. However, the contribution of Fam49b to the thymic development of T cells is unknown. To investigate this important issue, we generated a novel mouse line deficient in Fam49b (Fam49b-KO). We observed that Fam49b-KO double positive (DP) thymocytes underwent excessive negative selection, whereas the positive selection stage was unaffected. Fam49b deficiency impaired the survival of single positive thymocytes and peripheral T cells. This altered development process resulted in significant reductions in CD4 and CD8 single-positive thymocytes as well as peripheral T cells. Interestingly, a large proportion of the TCRγδ+ and CD8αα+TCRαβ+ gut intraepithelial T lymphocytes were absent in Fam49b-KO mice. Our results demonstrate that Fam49b dampens thymocytes TCR signaling in order to escape negative selection during development, uncovering the function of Fam49b as a critical regulator of the selection process to ensure normal thymocyte development and peripheral T cells survival.