CD25+ regulatory T cells develop in the thymus (nTregs), but may also be generated in the periphery upon stimulation of naive CD4 T cells under appropriate conditions (iTregs). To gain insight into the mechanisms governing iTreg development, we performed longitudinal transcriptional profiling of CD25+ T cells during their differentiation from uncommitted naive CD4 T cells. Microarray analysis of mRNA from CD25+ iTregs early after stimulation revealed expression of genes involved in cell cycle progression and T cell activation, which largely overlapped with genes expressed in CD25+ effector T cells (Teffs) used as a control. Whereas expression of these genes remained elevated in Teffs, it declined gradually in developing iTregs, resulting in a more quiescent phenotype in mature iTregs. A similar pattern of kinetics was observed for biological processes and for intracellular pathways over-represented within the expressed genes. A maximum dichotomy of transcriptional activity between iTregs and Teffs was reached at late stages of their maturation. Of interest, members of the FoxO and FoxM1 transcription factor family pathways exhibited a reciprocal expression pattern in iTregs and Teffs, suggesting a role of these transcription factors in determining T cell fate.