The random generation of antigen receptors in developing lymphocytes results in a considerable risk of autoimmunity. Regulatory T cells (T_reg cells) act in a dominant, trans-acting way to actively suppress immune activation and maintain immune tolerance. Here, we discuss the principal advances in our understanding of the molecular mechanisms of T_reg cell development and function with particular emphasis on the forkhead transcription factor Foxp3. Accumulating evidence suggests that T_reg cells represent a dedicated T cell lineage and that Foxp3 functions as the T_reg cell lineage specification factor. The aggressive early-onset lymphoproliferative syndrome resulting from Foxp3 deficiency identifies T_reg cells as vital mediators of immunological tolerance to self and Foxp3 as the mediator of the genetic mechanism of dominant tolerance.