Regulatory T (Treg) cells are critical in inducing and maintaining tolerance. Despite progress in understanding the basis of immune tolerance, mechanisms and molecules involved in the generation of Treg cells remain poorly understood. IFN regulatory factor (IRF)-1 is a pleiotropic transcription factor implicated in the regulation of various immune processes. In this study, we report that IRF-1 negatively regulates CD4+ CD25+ Treg cell development and function by specifically repressing Foxp3 expression. IRF-1-deficient (IRF-1−/−) mice showed a selective and marked increase of highly activated and differentiated CD4+ CD25+ Foxp3+ Treg cells in thymus and in all peripheral lymphoid organs. Furthermore, IRF-1−/− CD4+ CD25− T cells showed extremely high bent to differentiate into CD4+ CD25+ Foxp3+ Treg cells, whereas restoring IRF-1 expression in IRF-1−/− CD4+ CD25− T cells impaired their differentiation into CD25+ Foxp3+ cells. Functionally, both isolated and TGF-β-induced CD4+ CD25+ Treg cells from IRF-1−/− mice exhibited more increased suppressive activity than wild-type Treg cells. Such phenotype and functional characteristics were explained at a mechanistic level by the finding that IRF-1 binds a highly conserved IRF consensus element sequence (IRF-E) in the foxp3 gene promoter in vivo and negatively regulates its transcriptional activity. We conclude that IRF-1 is a key negative regulator of CD4+ CD25+ Treg cells through direct repression of Foxp3 expression.