Thymic-derived natural T regulatory cells (Tregs) are characterized by functional and phenotypic heterogeneity. Recently, a small fraction of peripheral Tregs has been shown to express Klrg1, but it remains unclear as to what extent Klrg1 defines a unique Treg subset. In this study, we show that Klrg1+ Tregs represent a terminally differentiated Treg subset derived from Klrg1− Tregs. This subset is a recent Ag-responsive and highly activated short-lived Treg population that expresses enhanced levels of Treg suppressive molecules and that preferentially resides within mucosal tissues. The development of Klrg1+ Tregs also requires extensive IL-2R signaling. This activity represents a distinct function for IL-2, independent from its contribution to Treg homeostasis and competitive fitness. These and other properties are analogous to terminally differentiated short-lived CD8+ T effector cells. Our findings suggest that an important pathway driving Ag-activated conventional T lymphocytes also operates for Tregs.