The cytokine transforming growth factor–β (TGF-β) converts naïve T cells into regulatory T (Treg) cells that prevent autoimmunity. However, in the presence of interleukin-6 (IL-6), TGF-β has also been found to promote the differentiation of naïve T lymphocytes into proinflammatory IL-17 cytokine-producing T helper 17 (T_H17) cells, which promote autoimmunity and inflammation. This raises the question of how TGF-β can generate such distinct outcomes. We identified the vitamin A metabolite retinoic acid as a key regulator of TGF-β–dependent immune responses, capable of inhibiting the IL-6–driven induction of proinflammatory T_H17 cells and promoting anti-inflammatory Treg cell differentiation. These findings indicate that a common metabolite can regulate the balance between pro- and anti-inflammatory immunity.