Regulatory T (T-reg) cells expressing the transcription factor Foxp3 have a pivotal role in maintaining immunological self-tolerance(1-5); yet, excessive T-reg cell activities suppress anti-tumour immune responses(6-8). Compared to the resting T-reg (rT(reg)) cell phenotype in secondary lymphoid organs, T-reg cells in non-lymphoid tissues exhibit an activated T-reg (aT(reg)) cell phenotype(9-11). However, the function of aT(reg) cells and whether their generation can be manipulated are largely unexplored. Here we show that the transcription factor Foxo1, previously demonstrated to promote T-reg cell suppression of lymphoproliferative diseases(12,13), has an unexpected function in inhibiting aT(reg)-cell-mediated immune tolerance in mice. We find that aT(reg) cells turned over at a slower rate than rT(reg) cells, but were not locally maintained in tissues. aT(reg) cell differentiation was associated with repression of Foxo1-dependent gene transcription, concomitant with reduced Foxo1 expression, cytoplasmic localization and enhanced phosphorylation at the Akt sites. T-reg-cell-specific expression of an Akt-insensitive Foxo1 mutant prevented downregulation of lymphoid organ homing molecules, and impeded T-reg cell homing to non-lymphoid organs, causing CD8(+) T-cell-mediated autoimmune diseases. Compared to T-reg cells from healthy tissues, tumour-infiltrating T-reg cells downregulated Foxo1 target genes more substantially. Expression of the Foxo1 mutant at a lower dose was sufficient to deplete tumour-associated T-reg cells, activate effector CD8(+) T cells, and inhibit tumour growth without inflicting autoimmunity. Thus, Foxo1 inactivation is essential for the migration of aT(reg) cells that have a crucial function in suppressing CD8(+) T-cell responses; and the Foxo signalling pathway in T-reg cells can be titrated to break tumour immune tolerance preferentially.