Regulatory T cells are promising candidates for the modulation of inflammation and autoimmunity. To generate regulatory T cells in vitro, we have infected naïve CD4+CD25- T cells with a retrovirus encoding the transcription factor Foxp3. Foxp3-infected T cells are similar to naturally occurring regulatory T cells as evidenced by surface marker expression and function. To investigate the effects of Foxp3-infected T cells on contact hypersensitivity (CHS) responses, sensitized mice were injected with Foxp3- or control virus-infected T cells. Only injection of Foxp3-infected T cells into sensitized mice significantly inhibited CHS compared to controls, indicating that Foxp3-infected T cells are suppressive in vivo. These findings prompted treatment of autoimmune-prone CD40L transgenic (tg) mice, which develop a severe systemic autoimmune disease including autoreactive T cells and autoantibodies, with Foxp3-infected T cells. Interestingly, injections of Foxp3-infected T cells into CD40L tg mice inhibited the ongoing development of autoimmune dermatitis and activation of cytotoxic CD8+ T cells. Strikingly, treatment with Foxp3-infected T cells reduced serum concentrations of antinuclear antibodies in CD40L tg mice, which was paralleled with reduced renal immunoglobulin depositions and increased kidney function. Together, these findings indicate that newly in vitro-generated regulatory T cells can be successfully used to treat inflammatory and ongoing autoimmune disorders.