Regulatory T cells (T_REGs) control the key aspects of tolerance and play a role in the lack of antitumor immune responses. Cyclophosphamide (CY) is a chemotherapeutic agent with a dose-dependent, bimodal effect on the immune system. Although a previous study demonstrated that CY reduces the number of T_REGs, the mechanism involved in this process has yet to be defined. In this report, it is established that low-dose CY not only decreases cell number but leads to decreased functionality of T_REGs. CY treatment enhances apoptosis and decreases homeostatic proliferation of these cells. Expression of GITR and FoxP3, which are involved in the suppressive activity of T_REGs, is down-regulated after CY administration, though the level of expression varies depending on the time studied. This is the first report demonstrating that CY, in addition to decreasing cell number, inhibits the suppressive capability of T_REGs. The relevance of the loss of suppressor functionality and the changes in gene expression are further discussed.