Our understanding of the pathways that regulate lymphocyte metabolism, as well as the effects of metabolism and its products on the immune response, is still limited. We report that a metabolic program controlled by the transcription factors hypoxia inducible factor-1α (HIF1-α) and aryl hydrocarbon receptor (AHR) supports the differentiation of type 1 regulatory T cell (Tr1) cells. HIF1-α controls the early metabolic reprograming of Tr1 cells. At later time points, AHR promotes HIF1-α degradation and takes control of Tr1 cell metabolism. Extracellular ATP (eATP) and hypoxia, linked to inflammation, trigger AHR inactivation by HIF1-α and inhibit Tr1 cell differentiation. Conversely, CD39 promotes Tr1 cell differentiation by depleting eATP. CD39 also contributes to Tr1 suppressive activity by generating adenosine in cooperation with CD73 expressed by responder T cells and antigen-presenting cells. These results suggest that HIF1-α and AHR integrate immunological, metabolic and environmental signals to regulate the immune response.