Naive lymphocytes continually enter and exit lymphoid organs in a recirculation process that is essential for immune surveillance. During immune responses, the egress process can be shut down transiently. When this occurs locally it increases lymphocyte numbers in the responding lymphoid organ; when it occurs systemically it can lead to immunosuppression as a result of the depletion of recirculating lymphocytes. Several mediators of the innate immune system are known to cause shutdown, including interferon alpha/beta (IFN-alpha/beta) and tumour necrosis factor, but the mechanism has been unclear. Here we show that treatment with the IFN-alpha/beta inducer polyinosine polycytidylic acid (hereafter 'poly(I:C)') inhibited egress by a mechanism that was partly lymphocyte-intrinsic. The transmembrane C-type lectin CD69 was rapidly induced and CD69-/- cells were poorly retained in lymphoid tissues after treatment with poly(I:C) or infection with lymphocytic choriomeningitis virus. Lymphocyte egress requires sphingosine 1-phosphate receptor-1 (S1P1), and IFN-alpha/beta was found to inhibit lymphocyte responsiveness to S1P. By contrast, CD69-/- cells retained S1P1 function after exposure to IFN-alpha/beta. In coexpression experiments, CD69 inhibited S1P1 chemotactic function and led to downmodulation of S1P1. In a reporter assay, S1P1 crosslinking led to co-crosslinking and activation of a CD69-CD3zeta chimaera. CD69 co-immunoprecipitated with S1P1 but not the related receptor, S1P3. These observations indicate that CD69 forms a complex with and negatively regulates S1P1 and that it functions downstream of IFN-alpha/beta, and possibly other activating stimuli, to promote lymphocyte retention in lymphoid organs.