The immune system protects us against foreign pathogens. However, if fine discrimination between self and non-self is not carried out properly, immunological attacks against self may be launched leading to autoimmune diseases, estimated to afflict up to 5% of the population. During the last decade it has become increasingly clear that regulatory CD4+CD25+ T cells (Treg cells) play an important role in the maintenance of immunological self-tolerance, and that this cell subset exerts its function by suppressing the proliferation or function of autoreactive T cells. Based on human and murine observations, this review presents a characterization of the phenotype and functions of the Treg cells in vitro and in vivo. An overview of the surface molecules associated with and the cytokines produced by the Treg cells is given and the origin, activation requirements and mode of action of the Treg cells are discussed. Finally, we address the possibility that Treg cells may play a central role in immune homeostasis, regulating not only autoimmune responses, but also immune responses toward foreign antigens.