Foxp3-expressing regulatory T (T reg) cells have been implicated in parasite-driven inhibition of host immunity during chronic infection. We addressed whether parasites can directly induce T reg cells. Foxp3 expression was stimulated in naive Foxp3− T cells in mice infected with the intestinal helminth Heligmosomoides polygyrus. In vitro, parasite-secreted proteins (termed H. polygyrus excretory-secretory antigen [HES]) induced de novo Foxp3 expression in fluorescence-sorted Foxp3− splenocytes from Foxp3–green fluorescent protein reporter mice. HES-induced T reg cells suppressed both in vitro effector cell proliferation and in vivo allergic airway inflammation. HES ligated the transforming growth factor (TGF) β receptor and promoted Smad2/3 phosphorylation. Foxp3 induction by HES was lost in dominant-negative TGF-βRII cells and was abolished by the TGF-β signaling inhibitor SB431542. This inhibitor also reduced worm burdens in H. polygyrus–infected mice. HES induced IL-17 in the presence of IL-6 but did not promote Th1 or Th2 development under any conditions. Importantly, antibody to mammalian TGF-β did not recognize HES, whereas antisera that inhibited HES did not affect TGF-β. Foxp3 was also induced by secreted products of Teladorsagia circumcincta, a related nematode which is widespread in ruminant animals. We have therefore identified a novel pathway through which helminth parasites may stimulate T reg cells, which is likely to be a key part of the parasite’s immunological relationship with the host.