CD4+ CD25+ regulatory T (Treg) cells play an essential role in maintaining tolerance to self and nonself. In several models of T cell-mediated (auto) immunity, Treg cells exert protective effects by the inhibition of pathogenic T cell responses. In addition, Treg cells can modulate T cell-independent inflammation. We now show that CD4+ CD25+ Treg cells are able to shed large amounts of TNFRII. This is paralleled by their ability to inhibit the action of TNF-α both in vitro and in vivo. In vivo, Treg cells suppressed IL-6 production in response to LPS injection in mice. In contrast, Treg cells from TNFRII-deficient mice were unable to do so despite their unhampered capacity to suppress T cell proliferation in a conventional in vitro suppression assay. Thus, shedding of TNFRII represents a novel mechanism by which Treg cells can inhibit the action of TNF, a pivotal cytokine driving inflammation.