A functional adaptive immune system depends on a diverse and self-tolerant population of T lymphocytes that are generated in the thymus and maintained in the peripheral lymphoid organs. Recent studies have defined the cytokine transforming growth factor-beta (TGF-beta) as a critical regulator of thymic T cell development as well as a crucial player in peripheral T cell homeostasis, tolerance to self antigens, and T cell differentiation during the immune response. The unique mechanism of TGF-beta activation and the plasticity of TGF-beta signaling create a stage for TGF-beta to integrate signals from multiple cell types and environmental cues to regulate T cells.