Thymus-derived, naturally occurring CD4 + Forkhead Box P3 + regulatory T cells (nTreg) have suppressive activity that is important for the establishment and maintenance of immune homeostasis in the healthy state. Abundant reports have demonstrated that they can suppress pathogenic processes in autoimmune diseases and inhibit transplant rejection and graft-versus-host disease. Far less is known about induced regulatory T cells (iTreg) that are generated from naive T cells in the periphery or in vitro by directing naive T cells to acquire suppressive function under the influence of transforming growth factor-β and other factors. In this review, we describe mechanisms by which naive T cells are thought to be converted into iTreg. We also discuss the suppressive potential of iTreg, particularly in comparison with their naturally occurring counterparts, focusing on those reports in which direct comparisons have been made. Based on current knowledge, we consider the rationale for using iTreg versus nTreg in clinical trials. © 2012 American Society for Histocompatibility and Immunogenetics.