FoxP3⁺ confers suppressive properties and is confined to regulatory T cells (T_reg) that potently inhibit autoreactive immune responses. In the transplant setting, natural CD4⁺ T_reg are critical in controlling alloreactivity and the establishment of tolerance. We now identify an important CD8⁺ population of FoxP3⁺ T_reg that convert from CD8⁺ conventional donor T cells after allogeneic but not syngeneic bone marrow transplantation. These CD8⁺ T_reg undergo conversion in the mesenteric lymph nodes under the influence of recipient dendritic cells and TGF-β. Importantly, this population is as important for protection from GVHD as the well-studied natural CD4⁺FoxP3⁺ population and is more potent in exerting class I–restricted and antigen-specific suppression in vitro and in vivo. Critically, CD8⁺FoxP3⁺ T_reg are exquisitely sensitive to inhibition by cyclosporine but can be massively and specifically expanded in vivo to prevent GVHD by coadministering rapamycin and IL-2 antibody complexes. CD8⁺FoxP3⁺ T_reg thus represent a new regulatory population with considerable potential to preferentially subvert MHC class I–restricted T-cell responses after bone marrow transplantation.