Stimulation of mouse CD4+ T cells in the presence of TGF-beta results in the expression of Foxp3 and induction of Treg function. Stimulation of human CD4+ T cells under similar conditions results in the expression of Foxp3, but the cells lack regulatory cell function. TGF-beta expressed on the surface of Treg also induces Foxp3 expression and Treg function in responder cells. Both of these mechanisms may play a role in vivo in the induction of antigen-specific extra-thymic Treg.