Transcription factors act in concert to induce lineage commitment towards Th1, Th2, or T regulatory (Treg) cells, and their counter-regulatory mechanisms were shown to be critical for polarization between Th1 and Th2 phenotypes. FOXP3 is an essential transcription factor for natural, thymus-derived (nTreg) and inducible Treg (iTreg) commitment; however, the mechanisms regulating its expression are as yet unknown. We describe a mechanism controlling iTreg polarization, which is overruled by the Th2 differentiation pathway. We demonstrated that interleukin 4 (IL-4) present at the time of T cell priming inhibits FOXP3. This inhibitory mechanism was also confirmed in Th2 cells and in T cells of transgenic mice overexpressing GATA-3 in T cells, which are shown to be deficient in transforming growth factor (TGF)-β–mediated FOXP3 induction. This inhibition is mediated by direct binding of GATA3 to the FOXP3 promoter, which represses its transactivation process. Therefore, this study provides a new understanding of tolerance development, controlled by a type 2 immune response. IL-4 treatment in mice reduces iTreg cell frequency, highlighting that therapeutic approaches that target IL-4 or GATA3 might provide new preventive strategies facilitating tolerance induction particularly in Th2-mediated diseases, such as allergy.