Effective resetting of the immune system cannot be achieved by non-specific immunosuppression. Instead, novel strategies aim at harnessing the body's natural tolerance mechanisms to rectify an Ag-specific response without disturbing other immune functions. Fine-tuning of the balance between Ag-specific effector and regulatory T (Tr) cells is a promising strategy that requires detailed understanding of the differentiation and expansion pathways of the relevant Tr cell subsets. Here we review recent developments regarding the control of alloreactivity by induction and expansion of Tr cells. T-cell activation in the presence of tolerogenic APC and cytokines leads to the induction of Tr cells, which can mediate tolerance through cytokine-dependent and/or contact-dependent mechanisms. Better understanding of the mechanisms of immune regulation mediated by Tr cells may enable fine-tuning of specific immune responses and pave the way for novel therapeutic approaches.