Although the development of regulatory T cells (T(reg) cells) in the thymus is defined by expression of the lineage marker Foxp3, the precise function of Foxp3 in T(reg) cell lineage commitment is unknown. Here we examined T(reg) cell development and function in mice with a Foxp3 allele that directs expression of a nonfunctional fusion protein of Foxp3 and enhanced green fluorescent protein (Foxp3DeltaEGFP). Thymocyte development in Foxp3DeltaEGFP male mice and Foxp3DeltaEGFP/+ female mice recapitulated that of wild-type mice. Although mature EGFP(+) CD4(+) T cells from Foxp3DeltaEGFP mice lacked suppressor function, they maintained the characteristic T(reg) cell 'genetic signature' and failed to develop from EGFP(-) CD4(+) T cells when transferred into lymphopenic hosts, indicative of their common ontogeny with T(reg) cells. Our results indicate that T(reg) cell effector function but not lineage commitment requires the expression of functional Foxp3 protein.