Regulatory T cell deficiency is evident in patients with lupus, but the casual [corrected] relationship and underlying mechanism leading to Treg deficiency are unclear. We analyzed the Treg profile, induction and functions of Treg in a lupus mouse model. A characteristic age-dependent biphasic change of Treg frequency was observed in the MRL/lpr mice, which developed a spontaneous lupus-like disease. After an early increase, Treg frequency in the peripheral lymphoid organs rapidly declined with age. Functionally, Treg from both young and old MRL/lpr mice were fully competent in suppressing the wild-type MRL/+ T effector cell (Teff) responses. Adoptive transfer of MRL/+ Treg markedly suppressed clinical disease in the MRL/lpr mice. We demonstrated that the reduced Treg frequency was a result of insufficient peripheral Treg expansion due to defective MRL/lpr Teff in IL-2 production, and the associated defects in dendritic cells, which could be fully restored by exogenous IL-2. In the absence of IL-2, MRL/lpr Teff but not MRL/lpr Treg were highly responsive to IL-15 and could expand rapidly due to enhanced IL-15R expression and IL-15 synthesis. These findings thus provide a clear causal relationship and immunological mechanism underlying Treg deficiency and systemic autoimmunity.