Foxp3 is crucial for both the development and function of regulatory T (Treg) cells; however, the posttranslational mechanisms regulating Foxp3 transcriptional output remain poorly defined. Here, we demonstrate that T cell factor 1 (TCF1) and Foxp3 associates in Treg cells and that active Wnt signaling disrupts Foxp3 transcriptional activity. A global chromatin immunoprecipitation sequencing comparison in Treg cells revealed considerable overlap between Foxp3 and Wnt target genes. The activation of Wnt signaling reduced Treg-mediated suppression both in vitro and in vivo, whereas disruption of Wnt signaling in Treg cells enhanced their suppressive capacity. The activation of effector T cells increased Wnt3a production, and Wnt3a levels were found to be greatly increased in mononuclear cells isolated from synovial fluid versus peripheral blood of arthritis patients. We propose a model in which Wnt produced under inflammatory conditions represses Treg cell function, allowing a productive immune response, but, if uncontrolled, could lead to the development of autoimmunity.