Regulatory T cells (T(reg)) express Foxp3, a forkhead family member that is necessary and sufficient for T(reg) lineage choice and function. Ectopic expression of Foxp3 in non-T(reg) leads to repression of the interleukin 2 (IL-2) and interferon gamma (IFNgamma) genes, gain of suppressor function, and induction of genes such as CD25, GITR, and CTLA-4, but the mode by which Foxp3 enforces this program is unclear. Using chromatin immunoprecipitation, we have demonstrated that Foxp3 binds to the endogenous IL-2 and IFNgamma loci in T cells, but only after T cell receptor stimulation. This activation-induced Foxp3 binding was abrogated by cyclosporin A, suggesting a role for the phosphatase calcineurin in Foxp3 function. We have also shown that binding of Foxp3 to the IL-2 and IFNgamma genes induces active deacetylation of histone H3, a process that inhibits chromatin remodeling and opposes gene transcription. Conversely, binding of Foxp3 to the GITR, CD25, and CTLA-4 genes results in increased histone acetylation. These data indicate that Foxp3 may regulate transcription through direct chromatin remodeling and show that Foxp3 function is influenced by signals from the TCR.