CD4(+)CD25(+)FOXP3(+) regulatory T cells (Tregs) control the activation and expansion of alloreactive and autoreactive T cell clones. Because uncontrolled activation and expansion of autoreactive T cells occur in an IL-7-rich environment, we explored the possibility that IL-7 may affect the function of Treg. We show that the functional high-affinity IL-7R is expressed on both naive and memory Tregs, and exposure to IL-7 results in STAT-5 phosphorylation. Naive, but not memory, Tregs proliferated greatly and acquired a memory phenotype in the setting of a suppression assay when IL-7 was present. Importantly, the presence of IL-7 abrogated the capacity of Tregs to suppress proliferation of conventional T cells in response to TCR activators, including alloantigens and autoantigens. Removal of IL-7 restored the suppressive function of Tregs. Preblocking of the IL-7R on the Tregs also restored suppressor function, indicating that IL-7 directly affected Treg function. Thus, prolonged periods of homeostatic expansion can temporarily release natural regulatory brakes on T cells, thereby providing an additional mechanism for activating and expanding alloreactive and autoreactive T cells.