Peripheral regulatory T (pT _reg ) cells are a key T cell lineage for mucosal immune tolerance and anti-inflammatory responses, and interleukin-2 receptor (IL-2R) signaling is critical for T _reg cell generation, expansion, and maintenance. The expression of IL-2R on pT _reg cells is tightly regulated to ensure proper induction and function of pT _reg cells without a clear molecular mechanism. We here demonstrate that Cathepsin W (CTSW), a cysteine proteinase highly induced in pT _reg cells under transforming growth factor–β stimulation is essential for the restraint of pT _reg cell differentiation in an intrinsic manner. Loss of CTSW results in elevated pT _reg cell generation, protecting the animals from intestinal inflammation. Mechanistically, CTSW inhibits IL-2R signaling in pT _reg cells by cytosolic interaction with and process of CD25, repressing signal transducer and activator of transcription 5 activation to restrain pT _reg cell generation and maintenance. Hence, our data indicate that CTSW acts as a gatekeeper to calibrate pT _reg cell differentiation and function for mucosal immune quiescence.