Stats (signal transducers and activators of transcription) regulate multiple aspects of T-cell fate. T regulatory (Treg) cells are a critical subset that limits immune responses, but the relative importance of Stat5a/b versus Stat3 for Treg cell development has been contentious. We observed that peripheral CD25(+)CD4(+) T cells were reduced in Stat5(DeltaN) mice; however, the levels of Foxp3, a transcription factor that is critical for Treg cells, were normal in splenic CD4(+) T cells even though they were reduced in the thymus. In contrast, complete deletion of Stat5a/b (Stat5(-/-)) resulted in dramatic reduction in CD25- or Foxp3-expressing CD4(+) T cells. An intrinsic requirement was demonstrated by reduction of Stat5a/b in CD4-expressing cells and by stem cell transplantation using Stat5(-/-) fetal liver cells. Stat5a/b were also required for optimal induction of Foxp3 in vitro and bound directly to the Foxp3 gene. Reduction of Stat3 in T cells did not reduce the numbers of Treg cells in the thymus or spleen; however, Stat3 was required for IL-6-dependent down-regulation of Foxp3. Therefore, we conclude that Stat5a/b have an essential, nonredundant role in regulating Treg cells, and that Stat3 and Stat5a/b appear to have opposing roles in the regulation of Foxp3.