Compelling evidence suggests that the transcription factor Foxp3 acts as a master switch governing the development and function of CD4(+) regulatory T cells (Tregs). However, whether transcriptional control of Foxp3 expression itself contributes to the development of a stable Treg lineage has thus far not been investigated. We here identified an evolutionarily conserved region within the foxp3 locus upstream of exon-1 possessing transcriptional activity. Bisulphite sequencing and chromatin immunoprecipitation revealed complete demethylation of CpG motifs as well as histone modifications within the conserved region in ex vivo isolated Foxp3(+)CD25(+)CD4(+) Tregs, but not in naïve CD25(-)CD4(+) T cells. Partial DNA demethylation is already found within developing Foxp3(+) thymocytes; however, Tregs induced by TGF-beta in vitro display only incomplete demethylation despite high Foxp3 expression. In contrast to natural Tregs, these TGF-beta-induced Foxp3(+) Tregs lose both Foxp3 expression and suppressive activity upon restimulation in the absence of TGF-beta. Our data suggest that expression of Foxp3 must be stabilized by epigenetic modification to allow the development of a permanent suppressor cell lineage, a finding of significant importance for therapeutic applications involving induction or transfer of Tregs and for the understanding of long-term cell lineage decisions.