The naturally occurring regulatory T cell (T(r)) is the pivotal cell type that maintains self-tolerance and exerts active immune suppression. The development and function of T(r) cells is controlled by Foxp3 (refs 1, 2), a lack of which results in loss of T(r) cells and massive multi-organ autoimmunity in scurfy mice and IPEX (immune dysregulation, polyendocrinopathy, enteropathy, X-linked) patients. It is generally thought that, through a binary mechanism, Foxp3 expression serves as an on-and-off switch to regulate positively the physiology of T(r) cells; however, emerging evidence associates decreased Foxp3 expression in T(r) cells with various immune disorders. We hypothesized that Foxp3 regulates T(r) cell development and function in a dose-dependent, non-binary manner, and that decreased Foxp3 expression can cause immune disease. Here, by generating a mouse model in which endogenous Foxp3 gene expression is attenuated in T(r) cells, we show that decreased Foxp3 expression results in the development of an aggressive autoimmune syndrome similar to that of scurfy mice, but does not affect thymic development, homeostatic expansion/maintenance or transforming-growth-factor-beta-induced de novo generation of Foxp3-expressing cells. The immune-suppressive activities of T cells with attenuated Foxp3 expression were nearly abolished in vitro and in vivo, whereas their anergic properties in vitro were maintained. This was accompanied by decreased expression of T(r) cell 'signature genes'. Notably, T cells expressing decreased Foxp3 preferentially became T-helper 2 (T(h)2)-type effectors even in a T(h)1-polarizing environment. These cells instructed T(h)2 differentiation of conventional T cells, which contributed to the immune diseases observed in these mice. Thus, decreased Foxp3 expression causes immune disease by subverting the suppressive function of T(r) cells and converting T(r) cells into effector cells; these findings are important for understanding the regulation of T(r) cell function and the aetiology of various human immune diseases.