Regulatory FoxP3+CD4+ T cells (Treg) are vital for maintaining the balance between tolerance, adequate immune response, and autoimmunity. Despite this immunoregulatory role, it has been shown that Treg may also produce proinflammatory cytokines. Here we present a distinct population of Treg, defined by CD161 expression, as the major source of FoxP3+ Treg-derived proinflammatory cytokines. CD161+ Treg can be followed throughout development, from thymus and cord blood to healthy child and adult samples. CD161+ Treg display anergy, are suppressive in cocultures with conventional T cells (Tconv), and possess a predominantly demethylated Treg-specific demethylated region of the FOXP3 locus. In addition to the production of interleukin (IL) 17A, interferon γ, and IL-2, CD161+FoxP3+ cells share markers with Tconv, including expression of the transcription factors retinoic acid-related orphan receptor Cv2 (RORCv2) and T-cell-specific T-box transcription factor (Tbet). Expression of CD161 and enrichment for cytokine production are stable characteristics of CD161+ Treg upon both short- and longer-term culture in vitro. Additionally, CD161+ Treg are highly enriched within the inflammatory environment of childhood arthritis, suggesting a role in disease. Our data therefore demonstrate that CD161+FoxP3+ T cells are a novel Treg subset, found in health and disease, which display high proinflammatory potential but also exhibit hallmark Treg characteristics.