T helper cells that produce IL-17 (T_H17 cells) promote autoimmunity in mice and have been implicated in the pathogenesis of human inflammatory diseases. At mucosal surfaces, T_H17 cells are thought to protect the host from infection, whereas regulatory T (T_reg) cells control immune responses and inflammation triggered by the resident microflora^,,,,. Differentiation of both cell types requires transforming growth factor-β (TGF-β), but depends on distinct transcription factors: RORγt (encoded by Rorc(γt)) for T_H17 cells and Foxp3 for T_reg cells^,,. How TGF-β regulates the differentiation of T cells with opposing activities has been perplexing. Here we demonstrate that, together with pro-inflammatory cytokines, TGF-β orchestrates T_H17 cell differentiation in a concentration-dependent manner. At low concentrations, TGF-β synergizes with interleukin (IL)-6 and IL-21 (refs ) to promote IL-23 receptor (Il23r) expression, favouring T_H17 cell differentiation. High concentrations of TGF-β repress IL23r expression and favour Foxp3⁺ T_reg cells. RORγt and Foxp3 are co-expressed in naive CD4⁺ T cells exposed to TGF-β and in a subset of T cells in the small intestinal lamina propria of the mouse. In vitro, TGF-β-induced Foxp3 inhibits RORγt function, at least in part through their interaction. Accordingly, lamina propria T cells that co-express both transcription factors produce less IL-17 (also known as IL-17a) than those that express RORγt alone. IL-6, IL-21 and IL-23 relieve Foxp3-mediated inhibition of RORγt, thereby promoting T_H17 cell differentiation. Therefore, the decision of antigen-stimulated cells to differentiate into either T_H17 or T_reg cells depends on the cytokine-regulated balance of RORγt and Foxp3.