Estrogen (E2) upregulates the FoxP3 gene that marks regulatory CD4+CD25+ T cells (Treg cells). However, E2 also inhibits the ability of antigen presenting cells (APC) to activate T cells. It is possible that these opposing functions might affect the degree of overt suppression during pregnancy and autoimmunity. To evaluate E2 effects on Treg cell function, we quantified FoxP3 levels and Treg suppression in CD4+CD25+ T cells from pregnant and E2-treated mice, and overt Treg suppression in E2- vs. placebo-pretreated mice with autoimmune encephalomyelitis. The data clearly demonstrate that enhanced expression of FoxP3, which occurs in pregnant mice and in mice treated exogenously with E2 pellets, results in a concomitant increase in functional suppression within the CD4+CD25(bright) Treg fraction of splenocytes. The similarities in FoxP3 expression and Treg cell function in E2-treated and pregnant mice implicate E2 as a major contributor for increasing Treg function during pregnancy. Surprisingly, suppression was not enhanced when Treg cells from E2-treated mice were activated with APC and CD4+CD25- responder T cells from the same E2-treated mice, a result consistent with impaired APC activation of Treg cells. In contrast, Treg suppression was strikingly enhanced in combined cell cultures from E2-pretreated mice that were protected from EAE induced with neuroantigen in complete Freund's adjuvant. These results suggest that E2 treatment may have opposing effects on Treg cells vs. APC that both contribute to overt suppression, but such effects are overcome and focused towards enhanced suppression in inflammatory environments produced during pregnancy and EAE.