We previously demonstrated that CD4(+)CD25(+) T regulatory cells (Tregs), important for the maintenance of immune tolerance and prevention of autoimmune disease, from patients with human T lymphotropic virus type I (HTLV-I)-associated myelopathy/tropical spastic paraparesis (HAM/TSP) exhibit reduced Foxp3 expression and Treg suppressor function compared with healthy donors. Since TGF-beta signaling has been previously reported to be critical for both Foxp3 expression and Treg function, we examined whether this signaling pathway was dysregulated in patients with HAM/TSP. Levels of TGF-beta receptor II (TGF-betaRII) as well as Smad7 (a TGF-beta-inducible gene) were significantly reduced in CD4(+) T cells in patients with HAM/TSP compared with healthy donors, and the expression of TGF-betaRII inversely correlated with the HTLV-I tax proviral load. Importantly, both CD4(+)CD25(+) and CD4(+)CD25(-) T cells from HAM/TSP patients exhibited reduced TGF-betaRII expression compared with healthy donors, which was associated with functional deficits in vitro, including a block in TGF-beta-inducible Foxp3 expression that inversely correlated with the HTLV-I tax proviral load, loss of Treg suppressor function, and escape of effector T cells from Treg-mediated control. This evidence suggests that a virus-induced breakdown of immune tolerance affecting both regulatory and effector T cells contributes to the pathogenesis of HAM/TSP.