CD4(+)FoxP3(+) regulatory T cells (T(reg)) play a critical role in maintaining self-tolerance and inhibiting autoimmune disease. Despite being a major focus of modern immunological investigation, many aspects of T(reg) biology remain unknown. In a screen for novel candidate genes involved in human T(reg) function, we detected the expression of an autoimmune susceptibility gene, FcRL3, in T(reg) but not in conventional CD4(+) T cells. FcRL3 is an orphan receptor of unknown function with structural homology to classical Fc receptors. Numerous genetic studies have demonstrated a link between a single nucleotide polymorphism in the FCRL3 promoter and both overexpression of FcRL3 and autoimmune diseases such as rheumatoid arthritis. Given the critical role of T(reg) in suppressing autoimmunity, we sought to ascertain how expression of FcRL3 relates to the phenotype, differentiation, and function of T(reg). We show in this study that FcRL3 is expressed on a population of thymically derived T(reg) that exhibits a memory phenotype and high levels of programmed cell death-1. Purified FcRL3(+) T(reg) are less responsive to antigenic stimulation in the presence of IL-2 than their FcRL3(-) counterparts, despite intact proximal and distal IL-2 signaling as determined by phosphorylation of Stat-5 and upregulation of Bcl2. In vitro suppression assays demonstrated that FcRL3(+) T(reg) have reduced capacity to suppress the proliferation of effector T cells. These data suggest that FcRL3 expression is associated with T(reg) dysfunction that may, in turn, contribute to the loss of self-tolerance and the development of autoimmunity.