Rosemary Kennedy (search), the oldest sister of President John F. Kennedy (search) and the inspiration for the Special Olympics, died Friday. She was 86.

Kennedy, the third child of Rose and Joseph Kennedy, was born mentally retarded and underwent a lobotomy when she was 23. She lived most of her life in a Jefferson, Wis., institution, the St. Coletta School for Exceptional Children.

She died at Fort Atkinson Memorial Health Hospital in Wisconsin with her brother Sen. Edward M. Kennedy and her sisters by her side, the family said in a statement.

"Rosemary was a lifelong jewel to every member of our family," the statement said. "From her earliest years, her mental retardation was a continuing inspiration to each of us and a powerful source of our family's commitment to do all we can to help all persons with disabilities live full and productive lives."

While she spent much of her life shielded from the public eye, her struggles with mental retardation inspired her sister to encourage millions of mentally disabled athletes to publicly celebrate their differences.

Rosemary Kennedy's condition became an inspiration to her younger sister, Eunice Kennedy Shriver, who founded the Special Olympics for mentally disabled athletes, and in 1984 she took over her sister's care after their mother had a stroke.

Rosemary's retardation became public in 1960, just after her brother John was elected president. The National Association for Retarded Children mentioned in a publication that the president-elect "has a mentally retarded sister who is in an institution in Wisconsin."

The following year, Eunice revealed more about her sister's story in an article for The Saturday Evening Post (search).

But as she got older, her father worried his daughter's mild condition would lead her into situations that could damage the family's reputation.

"Rosemary was a woman, and there was a dread fear of pregnancy, disease and disgrace," author Laurence Leamer wrote in an unauthorized Kennedy biography called "The Kennedy Women: The Saga of an American Family."

Doctors told Joseph Kennedy that a lobotomy, a medical procedure in which the frontal lobes of a patient's brain are scraped away, would help his daughter and calm her mood swings that the family found difficult to handle at home.

Rosemary lived in several private institutions before her father placed her in St. Coletta, an hour west of Milwaukee.

During the 1980s, Eunice involved Rosemary more in the lives of her siblings and their children. She attended family gatherings more frequently.