The immune toxicity of the ubiquitous environmental contaminant 2,3,7,8-tetrachlorodibenzo-p-dioxin (TCDD), commonly referred to as dioxin, has been studied for over 35 years but only recently has the profound immune suppression induced by TCDD exposure been linked to induction of regulatory T cells (Tregs). The effects of TCDD are mediated through its binding to the aryl hydrocarbon receptor (AHR), a ligand-activated transcription factor. The subsequent AHR-dependent effects on immune responses are determined by the cell types involved, their activation status, and the type of antigenic stimulus. Collectively, studies indicate that TCDD inhibits CD4+ T cell differentiation into T helper (Th)1, Th2, and Th17 effector cells, while inducing Foxp3-negative and/or preserving Foxp3+ Tregs. Although it is not yet clear how activation of AHR by TCDD induces Tregs, there is a potential therapeutic role for alternative AHR ligands in the treatment of immune-mediated disorders.