The aryl hydrocarbon receptor (AhR) participates in the differentiation of mouse regulatory T cells (T(reg) cells) and interleukin 17 (IL-17)-producing helper T cells (T(H)17 cells), but its role in human T cell differentiation is unknown. We investigated the role of AhR in the differentiation of human induced T(reg) cells (iT(reg) cells). We found that AhR activation promoted the differentiation of CD4(+)Foxp3(-) T cells, which produce IL-10 and control responder T cells through granzyme B. However, activation of AhR in the presence of transforming growth factor-beta1 induced Foxp3(+) iT(reg) cells, which suppress responder T cells through the ectonucleoside triphosphate diphosphohydrolase CD39. The induction of functional Foxp3(+) iT(reg) cells required coordinated action of the transcriptional regulators Smad1 and Aiolos. Thus, AhR is a potential target through which functional iT(reg) cells could be induced in human autoimmune disorders.