Maintenance of FOXP3 protein expression is crucial for differentiation and maturation of regulatory T (Treg) cells, which play important roles in immune homeostasis and immune tolerance. We demonstrate here that PDCD5 interacts with FOXP3, increases acetylation of FOXP3 in synergy with Tip60 and enhances the repressive function of FOXP3. In PDCD5 transgenic (PDCD5tg) mice, overexpression of PDCD5 enhanced the level of FOXP3 protein and percentage of CD4(+)CD25(+)FOXP3(+) cells. Nave CD4(+) T cells from PDCD5tg mice were more sensitive to TGF--induced Treg polarization and expansion. These induced Tregs retained normal suppressive function in vitro. Severity of experimentally-induced autoimmune encephalomyelitis (EAE) in PDCD5tg mice was significantly reduced relative to that of wild-type mice. The beneficial effect of PDCD5 likely resulted from increases of Treg cell frequency, accompanied by a reduction of the predominant pathogenic Th17/Th1 response. Activation-induced cell death enhanced by PDCD5 was also linked to this process. This is the first report revealing that PDCD5 activity in T cells suppresses autoimmunity by modulating Tregs. This study suggests that PDCD5 serves as a guardian of immunological functions and that the PDCD5-FOXP3-Treg axis may be a therapeutic target for autoimmunity.