Transforming growth factor-beta (TGF-beta) signaling in naive T cells induces expression of the transcription factor Foxp3, a 'master' regulator of regulatory T cells (T(reg) cells). However, the molecular mechanisms leading to Foxp3 induction remain unclear. Here we show that Itch-/- T cells were resistant to TGF-beta treatment and had less Foxp3 expression. The E3 ubiquitin ligase Itch associated with and promoted conjugation of ubiquitin to the transcription factor TIEG1. Itch cooperated with TIEG1 to induce Foxp3 expression, which was reversed by TIEG1 deficiency. Functionally, 'TGF-beta-converted' T(reg) cells generated from TIEG1-deficient mice were unable to suppress airway inflammation in vivo. These results suggest TIEG and Itch contribute to a ubiquitin-dependent nonproteolytic pathway that regulates inducible Foxp3 expression and the control of allergic responses.