Foxp3-expressing regulatory T cells (Tregs) are central regulators of immune homeostasis and tolerance. As it has been suggested that proper Treg function is compromised under inflammatory conditions, seeking for a pathway that enhances or stabilizes Treg function is a subject of considerable interest. We report that interleukin (IL)-27, an IL-12 family cytokine known to have both pro- and anti-inflammatory roles in T cells, plays a pivotal role in enhancing Treg function to control T cell-induced colitis, a model for inflammatory bowel disease (IBD) in humans. Unlike wild-type (WT) Tregs capable of inhibiting colitogenic T-cell expansion and inflammatory cytokine expression, IL-27R-deficient Tregs were unable to downregulate inflammatory T-cell responses. Tregs stimulated with IL-27 expressed substantially improved suppressive function in vitro and in vivo. IL-27 stimulation of Tregs induced expression of Lag3, a surface molecule implicated in negatively regulating immune responses. Lag3 expression in Tregs was critical to mediate Treg function in suppressing colitogenic responses. Human Tregs also displayed enhanced suppressive function and Lag3 expression following IL-27 stimulation. Collectively, these results highlight a novel function for the IL-27/Lag3 axis in modulating Treg regulation of inflammatory responses in the intestine.