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CD4(+)CD25(+) regulatory cells are a subpopulation of T lymphocytes of thymic origin. However, recent data suggest an alternative commitment of regulatory T cells in the periphery, although the precise mechanism is unknown. In the present work, we demonstrate that TGF-beta is able to induce Foxp3 expression and subsequently a regulatory phenotype in CD4(+)CD25(-) peripheral murine T cells. Similarly, TGF-beta induced Foxp3 in human CD4(+)CD25(-) T cells. Moreover, we show that the inhibitory Smad7 protein that is normally induced by TGF-beta and limits TGF-beta signaling, is strongly down-regulated by Foxp3 at the transcriptional level. Foxp3-mediated down-regulation of Smad7 subsequently rendered CD4(+)CD25(-) T cells highly susceptible to the morphogenic and regulatory effects of TGF-beta signaling via Smad3/4. In summary, we demonstrate that TGF-beta induces a regulatory phenotype in CD4(+)CD25(-) T cells through the induction of Foxp3 and a positive autoregulatory loop of TGF-beta signaling due to the absence of Smad7.

Cutting Edge: TGF-β Induces a Regulatory Phenotype in CD4+CD25− T Cells through Foxp3 Induction and Down-Regulation of Smad7