Differing from the mouse Foxp3 gene that encodes only one protein product, human FOXP3 encodes two major isoforms through alternative splicing-a longer isoform (FOXP3 FL) containing all the coding exons and a shorter isoform lacking the amino acids encoded by exon 2 (FOXP3 ΔE2). The two isoforms are naturally expressed in humans, yet their differences in controlling regulatory T cell phenotype and functionality remain unclear. In this study, we show that patients expressing only the shorter isoform fail to maintain self-tolerance and develop immunodeficiency, polyendocrinopathy, and enteropathy X-linked (IPEX) syndrome. Mice with Foxp3 exon 2 deletion have excessive follicular helper T (TFH) and germinal center B (GC B) cell responses, and develop systemic autoimmune disease with anti-dsDNA and antinuclear autoantibody production, as well as immune complex glomerulonephritis. Despite having normal suppressive function in in vitro assays, regulatory T cells expressing FOXP3 ΔE2 are unstable and sufficient to induce autoimmunity when transferred into Tcrb-deficient mice. Mechanistically, the FOXP3 ΔE2 isoform allows increased expression of selected cytokines, but decreased expression of a set of positive regulators of Foxp3 without altered binding to these gene loci. These findings uncover indispensable functions of the FOXP3 exon 2 region, highlighting a role in regulating a transcriptional program that maintains Treg stability and immune homeostasis.