The forkhead transcription factor Foxp3 is essential for the development of CD4+CD25+ regulatory T (Treg) cells and prevention of autoimmunity, but how it controls the Treg gene expression program is not understood. We describe here genome-wide location and expression data that identify Foxp3 target genes and report that many Foxp3 target genes are key modulators of T cell activation and function. Remarkably, the predominant effect of Foxp3 binding is to suppress the activation of target genes upon T cell stimulation. Foxp3 suppression of its targets appears to be crucial for the normal function of Treg cells because overactive variants of some target genes are known to be associated with autoimmune disease.