CD4(+)CD25(+)FOXP3(+) regulatory T-cells (T(regs)) form an important arm of the immune system responsible for suppressing untoward immune responses. T(regs) can be thymically derived or peripherally induced, even from CD4(+)CD25(-)FOXP3(-) T-cells. FOXP3 expression and in vitro suppressive activity are considered unique hallmarks of this dedicated and stable lineage of regulatory cells. Here we show that virtually all human CD4(+)CD25(-)FOXP3(-) T-cells and CD8(+)CD25(-)FOXP3(-) T-cells attain a transient FOXP3(+)CD25(+) state during activation. In this state of activation, these cells possess the classic phenotype of T(regs), in that they express similar markers and inhibit in vitro proliferation of autologous CD4(+)CD25(-) T-cells. This state is characterized by suppressed IFN-gamma production and robust TNF-alpha and IL-10 production. Interestingly, the great majority of the activated cells eventually downregulate FOXP3 expression, with a concomitant drop in suppressive ability. Our results show that, in humans, FOXP3 expression and T(reg) functionality are not exclusive features of a stable or unique lineage of T-cells but may also be a transient state attained by almost all T-cells. These results warrant caution in interpreting human studies using FOXP3 and suppressive activity as readouts and suggest that attempts to induce "T(regs)" may paradoxically result in induction of effector T-cells, unless stability is confirmed.