Transforming growth factor (TGF)-beta is a potent suppressive cytokine with an essential role in T-cell tolerance. TGF-beta acts on T cells to inhibit T-cell activation and effector T-cell differentiation and promote peripheral regulatory T cells. Recently there has been growing interest in targeting the TGF-beta pathway for the treatment of autoimmune diseases and cancer. Anti-CD3 antibody therapy of autoimmune diabetes leads to T-cell production of TGF-beta and the consequent inhibition of autoaggressive T cells. Inhibition of TGF-beta2 expression in gliomas restores the antitumor immune response, which appears to be a promising strategy to treat these tumors. Future studies will elucidate the cellular and molecular mechanisms of TGF-beta regulation of T-cell responses in autoimmune diseases and cancer, which will be crucial for the optimization of immunotherapeutic strategies and for the identification of novel drug targets.