Foxp3, which encodes the transcription factor scurfin, is indispensable for the development and function of CD4(+)CD25(+) regulatory T cells (Treg). Recent data suggest conversion of peripheral CD4(+)CD25(-) nai ve T cells to CD4(+)CD25(+) Treg by acquisition of Foxp3 through costimulation with TCR and TGF-beta or forced expression of the gene. One critical question is how Foxp3 causes T cells to become regulatory. In the present work, we demonstrate that Foxp3 can induce heme oxygenase-1 (HO-1) expression and subsequently such regulatory phenotypes as the suppression of nontransfected cells in a cell-cell contact-dependent manner as well as impaired proliferation and production of cytokines upon stimulation in Jurkat T cells. Moreover, we confirm the expression of both Foxp3 and HO-1 in peripheral CD4(+)CD25(+) Treg and suppressive function of the cells are relieved by the inhibition of HO-1 activity. In summary, we demonstrate that Foxp3 induces HO-1 expression and HO-1 engages in Foxp3-mediated immune suppression.