The forkhead family transicrption factor Foxp3 is critically important for the development and function of regulatory T cells (Tregs). Lack of Foxp3 leads to the development of fatal autoimmune lymphoproliferative diseases. Previously studies have shown that ectopic Foxp3 expression can phenotypically convert effector T cells to regulatory T cells. However, we have recently generated Foxp3 transgenic mice under the control of lck distal promoter. The transgene (Tg) Foxp3 is expressed in the majority of CD4+ and CD8+ T cells but at modulate levels. The ectopic expression of Foxp3 renders T cells hyporesponsive but conferred neither Treg phenotype nor suppressive function. In addition, we found that Foxp3 transgenic mice exhibit reduced susceptibility to collagen-induced arthritis (CIA). Foxp3 Tg mice had delayed disease onset and developed milder arthritis compare to wild type controls. The serum autoantibody levels were reduced in Foxp3 Tg mice. Both cytokine production and antigen-specific proliferation were decreased in T cells from draining lymph nodes of Foxp3 Tg mice. It has been shown that in human Foxp3 expression is not only confined to CD4+CD25+ Tregs but also in a high percentage of activated T cells that do not have suppressive capabilities. Thus, our results indicate that Foxp3 may play an important role in regulating immune responses and inflammation by attenuating proliferative responses and cytokine production of antigen-specific T cells.