Membrane-associated RING-CH1 (MARCH1) is an E3 ubiquitin ligase that mediates ubiquitination of MHCII in dendritic cells (DCs). MARCH1-mediated MHCII ubiquitination in DCs is known to regulate MHCII surface expression, thereby controlling DC-mediated T cell activation in vitro. However, its role at steady state or in vivo is not clearly understood. Here, we show that MARCH1 deficiency resulted in a substantial reduction in the number of thymus-derived regulatory T cells (T reg cells) in mice. A specific ablation of MHCII ubiquitination also significantly reduced the number of thymic T reg cells. Indeed, DCs deficient in MARCH1 or MHCII ubiquitination both failed to generate antigen-specific T reg cells in vivo and in vitro, although both exhibited an increased capacity for antigen presentation in parallel with the increased surface MHCII. Thus, MARCH1-mediated MHCII ubiquitination in DCs is required for proper production of naturally occurring T reg cells, suggesting a role in balancing immunogenic and regulatory T cell development.