Regulatory T cells (T(reg) cells) are central to the maintenance of immune homeostasis. However, little is known about the stability of T(reg) cells in vivo. In this study, we demonstrate that a substantial percentage of cells had transient or unstable expression of the transcription factor Foxp3. These 'exFoxp3' T cells had an activated-memory T cell phenotype and produced inflammatory cytokines. Moreover, exFoxp3 cell numbers were higher in inflamed tissues in autoimmune conditions. Adoptive transfer of autoreactive exFoxp3 cells led to the rapid onset of diabetes. Finally, analysis of the T cell receptor repertoire suggested that exFoxp3 cells developed from both natural and adaptive T(reg) cells. Thus, the generation of potentially autoreactive effector T cells as a consequence of Foxp3 instability has important implications for understanding autoimmune disease pathogenesis.