Naturally occurring CD4+CD25+ regulatory T cells mediate immune suppression to limit immunopathogenesis associated with chronic inflammation, persistent infections and autoimmune diseases. Their mode of suppression is contact-dependent, antigen-nonspecific and involves a nonredundant contribution from the cytokine transforming growth factor (TGF)-beta. Not only can TGF-beta mediate cell-cell suppression between the regulatory T cells and CD4+CD25- or CD8+ T cells, but new evidence also reveals its role in the conversion of CD4+CD25- T cells, together with TCR antigen stimulation, into the regulatory phenotype. Elemental to this conversion process is induction of expression of the forkhead transcription factor, Foxp3. This context-dependent coercion of naive CD4+ T cells into a powerful subset of regulatory cells provides a window into potential manipulation of these cells to orchestrate therapeutic intervention in diseases characterized by inadequate suppression, as well as a promising means of controlling pathologic situations in which excessive suppression dominates.