The immune system must balance defense against pathogens with minimizing harmful immune responses to self-antigens and commensal microorganisms. Regulatory T (Treg) cells play a crucial role in this balance by suppressing immune-mediated inflammation. The discovery of Foxp3, the transcription factor specifying the Treg cell lineage, has advanced understanding of Treg cell biology. This review discusses the cellular and molecular mechanisms of Treg cell differentiation and function. Key findings include: 1. **Foxp3 as a Central Player**: Foxp3 is essential for Treg cell differentiation and function. Mutations in *Foxp3* lead to severe autoimmune diseases, highlighting its critical role. 2. **Thymic Differentiation**: Treg cells are generated in the thymus, where they are influenced by TCR signaling, costimulatory signals, and cytokines like IL-2 and TGF-β. Strong TCR signals and suboptimal costimulation promote Foxp3 induction. 3. **Peripheral Differentiation**: Peripheral Treg cells differentiate in response to non-self antigens, such as food and commensal microorganisms. They require high-affinity TCR signaling, suboptimal costimulation, and TGF-β for differentiation. 4. **Cytokine Signaling**: TGF-β and IL-2 are critical for peripheral Treg cell differentiation. TGF-β signaling is involved in survival and fitness of Treg cells, while IL-2 opposes Th17 cell differentiation. 5. **Mucosal Tissues**: Mucosal tissues, such as the gut-associated lymphoid tissues (GALT), are key sites for Treg cell generation due to the presence of retinoic acid and specific antigens. 6. **TCR Specificity**: Treg cells display distinct TCR repertoires in different tissues, reflecting their antigen-specific functions. iTreg cells in the gut may control responses to food and commensal microorganisms. 7. **Transcriptional Programs**: Foxp3 activates a set of genes that are essential for Treg cell identity and function, including those involved in suppression and survival. Overall, the review highlights the multifaceted mechanisms by which Treg cells maintain immune homeostasis and prevent autoimmune and inflammatory diseases.The immune system must balance defense against pathogens with minimizing harmful immune responses to self-antigens and commensal microorganisms. Regulatory T (Treg) cells play a crucial role in this balance by suppressing immune-mediated inflammation. The discovery of Foxp3, the transcription factor specifying the Treg cell lineage, has advanced understanding of Treg cell biology. This review discusses the cellular and molecular mechanisms of Treg cell differentiation and function. Key findings include: 1. **Foxp3 as a Central Player**: Foxp3 is essential for Treg cell differentiation and function. Mutations in *Foxp3* lead to severe autoimmune diseases, highlighting its critical role. 2. **Thymic Differentiation**: Treg cells are generated in the thymus, where they are influenced by TCR signaling, costimulatory signals, and cytokines like IL-2 and TGF-β. Strong TCR signals and suboptimal costimulation promote Foxp3 induction. 3. **Peripheral Differentiation**: Peripheral Treg cells differentiate in response to non-self antigens, such as food and commensal microorganisms. They require high-affinity TCR signaling, suboptimal costimulation, and TGF-β for differentiation. 4. **Cytokine Signaling**: TGF-β and IL-2 are critical for peripheral Treg cell differentiation. TGF-β signaling is involved in survival and fitness of Treg cells, while IL-2 opposes Th17 cell differentiation. 5. **Mucosal Tissues**: Mucosal tissues, such as the gut-associated lymphoid tissues (GALT), are key sites for Treg cell generation due to the presence of retinoic acid and specific antigens. 6. **TCR Specificity**: Treg cells display distinct TCR repertoires in different tissues, reflecting their antigen-specific functions. iTreg cells in the gut may control responses to food and commensal microorganisms. 7. **Transcriptional Programs**: Foxp3 activates a set of genes that are essential for Treg cell identity and function, including those involved in suppression and survival. Overall, the review highlights the multifaceted mechanisms by which Treg cells maintain immune homeostasis and prevent autoimmune and inflammatory diseases.