The forkhead family protein FOXP3 acts as a repressor of transcription and is both an essential and sufficient regulator of the development and function of regulatory T cells. The molecular mechanism by which FOXP3-mediated transcriptional repression occurs remains unclear. Here, we report that transcriptional repression by FOXP3 involves a histone acetyltransferase-deacetylase complex that includes histone acetyltransferase TIP60 (Tat-interactive protein, 60 kDa) and class II histone deacetylases HDAC7 and HDAC9. The N-terminal 106-190 aa of FOXP3 are required for TIP60-FOXP3, HDAC7-FOXP3 association, as well as for the transcriptional repression of FOXP3 via its forkhead domain. FOXP3 can be acetylated in primary human regulatory T cells, and TIP60 promotes FOXP3 acetylation in vivo. Overexpression of TIP60 but not its histone acetyltransferase-deficient mutant promotes, whereas knockdown of endogenous TIP60 relieved, FOXP3-mediated transcriptional repression. A minimum FOXP3 ensemble containing native TIP60 and HDAC7 is necessary for IL-2 production regulation in T cells. Moreover, FOXP3 association with HDAC9 is antagonized by T cell stimulation and can be restored by the protein deacetylation inhibitor trichostatin A, indicating a complex dynamic aspect of T suppressor cell regulation. These findings identify a previously uncharacterized complex-based mechanism by which FOXP3 actively mediates transcriptional repression.