Regulatory T cells (T reg cells) are a population of CD4⁺ T cells that limit immune responses. FoxP3 is a master control transcription factor for development and function of these cells, but its regulation is poorly understood. We have identified a T cell receptor–responsive enhancer in the FoxP3 first intron that is dependent on a cyclic-AMP response element binding protein (CREB)/activating transcription factor (ATF) site overlapping a CpG island. Methylation of this island inversely correlates with CREB binding and FoxP3 expression. Interestingly, transforming growth factor-β, which induces T reg cell formation, decreases methylation of the CpG island and increases FoxP3 expression. Similarly, inhibiting methylation with 5-azacytidine or knocking down the DNA methyltransferase Dnmt1 also induces FoxP3 expression. Conversely, methylation of the CpG island, which decreases CREB binding or expression of dominant-negative CREB, decreases FoxP3 gene expression. Thus, T cell receptor–induced FoxP3 expression in T reg cells is controlled both by sequence-specific binding of CREB/ATF and by DNA methylation of a CpG island.