Homeostasis in the immune system is maintained by specialized regulatory CD4+ T cells (T reg) expressing transcription factor Foxp3. According to the current paradigm, high-affinity interactions between TCRs and class II MHC-peptide complexes in thymus “instruct” developing thymocytes to up-regulate Foxp3 and become T reg cells. However, the loss or down-regulation of Foxp3 does not disrupt the development of T reg cells but abrogates their suppressor function. In this study, we show that Foxp3-deficient T reg cells in scurfy mice harboring a null mutation of the Foxp3 gene retained cellular features of T reg cells including in vitro anergy, impaired production of inflammatory cytokines, and dependence on exogenous IL-2 for proliferation and homeostatic expansion. Foxp3-deficient T reg cells expressed a low level of activation markers, did not expand relative to other CD4+ T cells, and produced IL-4 and immunomodulatory cytokines IL-10 and TGF-β when stimulated. Global gene expression profiling revealed significant similarities between T reg cells expressing and lacking Foxp3. These results argue that Foxp3 deficiency alone does not convert T reg cells into conventional effector CD4+ T cells but rather these cells constitute a distinct cell subset with unique features.