Immunoregulatory T cells of CD4⁺CD25⁺ phenotype suppress T cell function and protect rodents from organ‐specific autoimmune disease. The human counterpart of this subset of T cells expresses high levels of CD25 and its role in human autoimmune disorders is currently under intense investigation. In multiple sclerosis (MS), a chronic inflammatory disease of the central nervous system (CNS), the activation of circulating self‐reactive T cells with specificity for myelin components is considered to be an important disease initiating event. Here, we investigated whether MS is associated with an altered ability of CD4⁺CD25^high regulatory T cells (T_reg) to confer suppression of myelin‐specific immune responses. Whereas T_reg frequencies were equally distributed in blood and cerebrospinal fluid of MS patients and did not differ compared to healthy controls, the suppressive potency of patient‐derived CD4⁺CD25^high T lymphocytes was impaired. Their inhibitory effect on antigen‐specific T cell proliferation induced by human recombinant myelin oligodendrocyte protein as well as on immune responses elicited by polyclonal and allogeneic stimuli was significantly reduced compared to healthy individuals. The effect was persistent and not due to responder cell resistance or altered survival of T_reg, suggesting that a defective immunoregulation of peripheral T cells mediated by CD4⁺CD25^high T lymphocytes promotes CNS autoimmunity in MS.