Inflammatory T cells are thought to be central to the pathology of autoimmune arthritis. Th17 cells, CD4 T cells that secrete the pro-inflammatory cytokine IL-17 play a critical role in murine models of arthritis. Recent evidence from human studies suggests that Th17 cells may be important players in several autoimmune diseases, including seronegative arthritis in adults, childhood arthritis [juvenile idiopathic arthritis (JIA)]. It was surprising to find that the development of Th17 cells is closely related to that of an immunoregulatory subset called regulatory T cells (Tregs). Tregs are important in the maintenance of immune homeostasis. Defects in Treg function or reduced numbers have been documented in several human autoimmune diseases, including RA and JIA. Conditions that typically favour the development of Tregs and promote tolerance can be subverted by inflammatory signals towards supporting the generation of Th17 cells. In animal models, the enhancement of Th17 cell differentiation is at the expense of Tregs, and these combined changes trigger autoimmunity. Several mechanisms have come to light that control this reciprocal relationship between Tregs and Th17 cells, including the action of pro-inflammatory cytokines such as IL-1beta. Anti-rheumatic biologic therapies may offer a means of restoring the Th17/Treg balance in favour of Tregs and thereby re-establishing immune tolerance.