Factors influencing the development of CD4+CD25+ T-cells in vivo are poorly understood. In order to investigate the contribution of TGFβ1 to the development and function of CD4+CD25+ T-cells, we generated a gain of function mutation resulting in the overexpression of an active form of TGFβ1 in T-cells under control of the human CD2 promoter. In peripheral lymphoid organs and in the thymus, the frequency of CD4+CD25+ T-cells was increased in transgenic mice. This appeared to be due to an autocrine effect of TGFβ on T-cells, since concomitant impairment of TGFβ-signaling in double transgenic mice resulted in a phenotype similar to wild type. In contrast, in single transgenic mice with impaired TGFβ-signaling in T-cells, CD4+CD25+ T-cell numbers were reduced in peripheral lymphoid organs but not in the thymus. In addition, TGFβ was found to regulate the expression of Foxp3 in vivo, a transcription factor essential for the generation and function of regulatory T-cells. In CD4+CD25+ T-cells, TGFβ1 increased the expression of Foxp3, whereas a decreased expression was seen in CD4+CD25+ T-cells with impaired TGFβ-signaling. TGFβ1 induced the expression of IL-10 in transgenic T-cells, but the increased in vitro suppressive capacity observed in transgenic CD4+CD25+ T-cells was due to the secretion of TGFβ and not IL-10. Therefore, our study provides in vivo evidence for a role of TGFβ in the homeostasis of CD4+CD25+ T-cells.