Signaling through the G protein–coupled receptors for the complement fragments C3a and C5a (C3aR and C5aR, respectively) by dendritic cells and CD4⁺ cells provides costimulatory and survival signals to effector T cells. Here we found that when signals from C3aR and C5aR were not transduced into CD4⁺ cells, signaling via the kinases PI(3)Kγ, Akt and mTOR ceased, activation of the kinase PKA increased, autoinductive signaling by transforming growth factor-β1 (TGF-β1) initiated and CD4⁺ T cells became Foxp3⁺ induced regulatory T cells (iT_reg cells). Endogenous TGF-β1 suppressed signaling through C3aR and C5aR by preventing the production of C3a and C5a and upregulating C5L2, an alternative receptor for C5a. The absence of signaling via C3aR and C5aR resulted in lower expression of costimulatory molecules and interleukin 6 (IL-6) and more production of IL-10. The resulting iT_reg cells exerted robust suppression, had enhanced stability and suppressed ongoing autoimmune disease. Antagonism of C3aR and C5aR can also induce functional human iT_reg cells.