During the last decade, a unique mechanism of negative regulation of immune responses and inflammation by a dedicated population of so-called regulatory T cells (Treg) has become a focus of intensive investigation. Through the discovery of transcription factor Foxp3 as a central molecular determinant of differentiation and function of Treg cells, the complex biology of these cells, including maintenance of immunological tolerance to “self” and regulation of immune responses to pathogens, commensals, and tumors, has become amenable to mechanistic studies. In this review, we discuss the molecular aspects of Treg cell lineage commitment, maintenance, and function.