Peroxisome proliferator-activated receptor (PPAR)gamma is a nuclear hormone receptor primarily characterized for its effect on insulin metabolism. PPARgamma ligands, used to treat human type 2 diabetes, also down-regulate most immune system cells including APCs and pathogenic T cells. These effects putatively underlie the efficacy of PPARgamma ligands in treating animal models of autoimmunity, leading to projections of therapeutic potential in human autoimmunity. However, the relationship between PPARgamma ligands and CD4+CD25+ regulatory T cells (Tregs) has not been examined. Specifically, no studies have examined the role of Tregs in mediating the in vivo immunoregulatory effects of PPARgamma ligands, and there have been no investigations of the use of PPARgamma ligands to treat autoimmunity in the absence of Tregs. We now characterize the novel relationship between ciglitazone, a thiazolidinedione class of PPARgamma ligand, and both murine natural Tregs (nTregs) and inducible Tregs (iTregs). In vitro, ciglitazone significantly enhances generation of iTregs in a PPARgamma-independent manner. Surprisingly, and contrary to the current paradigm, we find that, in a model of graft-vs-host disease, the immunotherapeutic effect of ciglitazone requires the presence of nTregs that express PPARgamma. Overall, our results indicate that, unlike its down-regulatory effect on other cells of the immune system, ciglitazone has an enhancing effect on both iTregs and nTregs, and this finding may have important implications for using PPARgamma ligands in treating human autoimmune disease.