Murine contact hypersensitivity (CHS) is a dendritic cell (DC)-dependent T-cell-mediated inflammation with CD8+ T cells as effectors and CD4+ T cells as regulators (Treg cells) that models human allergic contact dermatitis. The integrin αE(CD103) is expressed by some T-cell and DC subsets and has been implicated in epithelial lymphocyte localization, but its role in immune regulation remains enigmatic. We have identified a function for CD103 in the development of cutaneous allergic immune responses. CHS responses, but not irritant contact dermatitis, were significantly augmented in CD103-deficient mice in hapten-challenged skin. Phenotype and function of skin DCs during sensitization were normal, whereas adoptive transfer experiments revealed that the elevated CHS response in CD103-deficient mice is transferred by primed T cells and is independent of resident cells in recipient mice. While T-cell counts were elevated in challenged skin of CD103-deficient mice, the FoxP3 expression level of CD4+CD25+ Treg cells was significantly reduced, indicating impaired functionality. Indeed, Treg cells from CD103-deficient mice were not able to suppress CHS reactions during the elicitation phase. Further, CD103 on FoxP3+ Treg cells was involved in Treg retention to inflamed skin. These findings indicate an unexpected dichotomous functional role for CD103 on Treg cells by modulating FoxP3 expression.