The immune system has evolved mechanisms to recognize and eliminate threats, as well as to protect against self-destruction. Tolerance to self-antigens is generated through two fundamental mechanisms: (a) elimination of self-reactive cells in the thymus during selection and (b) generation of a variety of peripheral regulatory cells to control self-reactive cells that escape the thymus. It is becoming increasing apparent that a population of thymically derived CD4+ regulatory T cells, exemplified by the expression of the IL-2Ralpha chain, is essential for the maintenance of peripheral tolerance. Recent work has shown that the forkhead family transcription factor Foxp3 is critically important for the development and function of the regulatory T cells. Lack of Foxp3 leads to development of fatal autoimmune lymphoproliferative disease; furthermore, ectopic Foxp3 expression can phenotypically convert effector T cells to regulatory T cells. This review focuses on Foxp3 expression and function and highlights differences between humans and mice regarding Foxp3 regulation.