The phagocyte NAPDH–oxidase complex consists of several phagocyte oxidase (phox) proteins, generating reactive oxygen species (ROS) upon activation. ROS are involved in the defense against microorganisms and also in immune regulation. Defective ROS formation leads to chronic granulomatous disease (CGD) with increased incidence of autoimmunity and disturbed resolution of inflammation. Because regulatory T cells (Tregs) suppress autoimmune T-cell responses and are crucial in down-regulating immune responses, we hypothesized that ROS deficiency may lead to decreased Treg induction. Previously, we showed that in p47^phox-mutated mice, reconstitution of macrophages (Mph) with ROS-producing capacity was sufficient to protect the mice from arthritis. Now, we present evidence that Mph-derived ROS induce Tregs. In vitro, we showed that Mph ROS-dependently induce Treg, using an NADPH-oxidase inhibitor. This finding was confirmed genetically: rat or human CGD Mph with mutated p47^phox or gp91^phox displayed hampered Treg induction and T-cell suppression. However, basal Treg numbers in these subjects were comparable to those in controls, indicating a role for ROS in induction of peripheral Tregs. Induction of allogeneic delayed-type hypersensitivity with p47^phox-mutated Mph confirmed the importance of Mph-derived ROS in Treg induction in vivo. We conclude that NAPDH oxidase activity in Mph is important for the induction of Tregs to regulate T cell-mediated inflammation.