L oss of Treg function appears to be a critical factor in the pathogenesis of human autoimmune diseases. Attention has focused on defects of CD4⁺CD25^high Tregs, and techniques have been developed to determine their function. In contrast, the role of Tr1 regulatory T cells, which secrete the antiinflammatory cytokine IL-10, in autoimmune disease has not been well assessed. CD46 is a newly defined costimulatory molecule for T cell activation, and CD46-costimulated human T cells induce a Tr1 Treg phenotype with considerable amounts of IL-10 secretion. Here, we examined the role of Tr1 cells in patients with multiple sclerosis (MS) by stimulating CD4⁺ T cells with anti-CD3 and -CD46 mAbs and measuring IL-10 secretion. There were striking defects in the induction of Tr1 cells with CD46 costimulation as measured by IL-10 but not IFN-γ secretion in patients with MS compared with healthy subjects. This loss of Tr1 cell–associated IL-10 secretion was specific to CD46 and not CD28 costimulation and was associated with an altered regulation of the CD46-Cy2 isoform that differentially regulates T cell function in a CD46-transgenic murine model. These data demonstrate a second major Treg defect in human autoimmune disease associated with the CD46 pathway.