Although polyclonal regulatory T cells (Tregs) that once expressed Foxp3 (ex-Tregs) derived from Foxp3(+) Tregs have been described in homeostatic and autoimmune settings, little is known regarding the influence of the tumor environment on ex-Treg development. After adoptive transfer of HY-specific green Tregs (peripheral or thymic) to Rag2(-/-) B6 female mice bearing syngeneic HY-expressing MB49 tumors, a significant fraction rapidly lost expression of Foxp3. On the second transfer to a Rag2(-/-) B6 male environment, these ex-Tregs expanded strongly, whereas Tregs that maintained expression of Foxp3 expression did not. Both FACS and quantitative real-time-PCR analysis revealed that ex-Tregs upregulated genes characteristic of a Th1 effector-memory phenotype including IFN-γ and downregulated a panel of Treg-specific genes. Peripheral HY-specific green Tregs were adoptively transferred to Rag2(-/-) B6 male mice, to dissect the factors regulating ex-Treg differentiation. Development of ex-Tregs was more efficient in the mesenteric lymph node (mLN) than peripheral lymph node environment, correlating with a much greater level of IL-6 mRNA in mLN. In addition, the preferential development of ex-Tregs in mLN was significantly impaired by cotransfer of HY-specific naive CD4 T cells. Collectively, our study not only demonstrates the plasticity of Ag-specific Tregs in the context of the tumor environment, but also defines key molecular and cellular events that modulate ex-Treg differentiation.