Understanding the processes by which certain mucosal pathogens and their products induce regulatory T cells (Tregs) is important in determining mechanisms of pathogenicity and may point toward their use in treating immunological disorders. Accordingly, we have studied the events that follow mucosal administration of the B subunit of E. coli heat-labile enterotoxin (EtxB). EtxB modulates the response to co-administered antigens and can prevent autoimmune disease. Our data show that EtxB translocates across the nasal epithelium, modulating the expression of interleukin-10 (IL-10) and transforming growth factor-β(1) (TGF-β(1)). The modulated microenvironment drives an increase in Forkhead box P3 (Foxp3)-positive T cells, predominantly in the CD4(+)CD25(-) subset. Adoptive transfer experiments showed that enhanced Foxp3 expression was particularly evident in recently activated T cells by concomitant unrelated antigen challenge, and was both TGF-β(1) and IL-10 dependent. This ability to alter T-cell differentiation pathways following mucosal delivery explains how EtxB may modify mucosal immune environments and prevent unwanted pathologies.