CD4+Foxp3+ regulatory T cells (Treg) are essential for immune homeostasis and maintenance of self-tolerance. They are produced in the thymus and also generated de novo in the periphery in a TGF-β-dependent manner. Foxp3+ Treg are also required to achieve tolerance to transplanted tissues when induced by coreceptor or costimulation blockade. Using TCR-transgenic mice to avoid issues of autoimmune pathology, we show that Foxp3 expression is both necessary and sufficient for tissue tolerance by coreceptor blockade. Moreover, the known need in tolerance induction for TGF-β signaling to T cells can wholly be explained by its role in induction of Foxp3, as such signaling proved dispensable for the suppressive process. We analyzed the relative contribution of TGF-β and Foxp3 to the transcriptome of TGF-β-induced Treg and showed that TGF-β elicited a large set of downregulated signature genes. The number of genes uniquely modulated due to the influence of Foxp3 alone was surprisingly limited. Retroviral-mediated conditional nuclear expression of Foxp3 proved sufficient to confer transplant-suppressive potency on CD4+ T cells and was lost once nuclear Foxp3 expression was extinguished. These data support a dual role for TGF-β and Foxp3 in induced tolerance, in which TGF-β stimulates Foxp3 expression, for which sustained expression is then associated with acquisition of tolerance. Copyright © 2012 by The American Association of Immunologists, Inc.