Several strategies are being designed to test the therapeutic potential of Ag-specific regulatory T cells to prevent or treat autoimmune diseases. In this study, we demonstrate that naive CD4+ Foxp3− T cells specific for a naturally expressed autoantigen (H+/K+ ATPase) can be converted to Foxp3+ T regulatory cells (Tregs) when stimulated in presence of TGFβ. TGFβ-induced Tregs (iTregs) have all the characteristics of naturally generated regulatory T cells in vitro, and more importantly, are effective at preventing organ-specific autoimmunity in a murine model of autoimmune gastritis. H+/K+ ATPase specific iTregs were able to inhibit the initial priming and proliferation of autoreactive T cells, and appear to do so by acting on H+/K+ ATPase presenting dendritic cells (DC). DC exposed to iTregs in vivo were reduced in their ability to stimulate proliferation and cytokine production by H+/K+ ATPase specific T cells. iTregs specifically reduced CD80 and CD86 expression on the surface of H+/K+ ATPase presenting DC in vitro. These studies reveal the therapeutic potential of Ag specific iTregs to prevent autoimmunity, and provide a mechanism by which this population of regulatory T cells, and perhaps others, mediate their suppressive effects in vivo.