Anti-inflammatory signals play an essential role in constraining the magnitude of an inflammatory response. Extracellular adenosine is a critical tissue-protective factor, limiting the extent of inflammation. Given the potent anti-inflammatory effects of extracellular adenosine, we sought to investigate how extracellular adenosine regulates T cell activation and differentiation. Adenosine receptor activation by a pan adenosine-receptor agonist enhanced the abundance of murine regulatory T cells (Tregs), a cell type critical in constraining inflammation. Gene expression studies in both naïve CD4 T cells and Tregs revealed that these cells expressed multiple adenosine receptors. Based on recent studies implicating the Adora2b in endogenous anti-inflammatory responses during acute inflammation, we used a pharmacologic approach to specifically activate Adora2b. Indeed, these studies revealed robust enhancement of Treg differentiation in wild-type mice, but not in Adora2b(-/-) T cells. Finally, when we subjected Adora2b-deficient mice to endotoxin-induced pulmonary inflammation, we found that these mice experienced more severe inflammation, characterized by increased cell recruitment and increased fluid leakage into the airways. Notably, Adora2b-deficient mice failed to induce Tregs after endotoxin-induced inflammation and instead had an enhanced recruitment of pro-inflammatory effector T cells. In total, these data indicate that the Adora2b adenosine receptor serves a potent anti-inflammatory role, functioning at least in part through the enhancement of Tregs, to limit inflammation.