Thymus-derived, naturally occurring CD4(+)CD25(+)Foxp3(+) regulatory T cells (nTregs) and Tregs induced in the periphery (iTregs) have both been implicated in regulating immune responses. However, the relationship between these populations in the same host, and their relative contribution to the overall Treg pool, has not been examined. Using a tumor-induced T cell tolerance model, we find that expansion of nTregs and de novo generation of iTregs both contribute to tumor-specific T cell tolerance. In this system in which the number of tumor-specific nTregs can be controlled, the efficiency of nTreg expansion significantly exceeds that of the induction of Tregs from uncommitted progenitors in the tumor-bearing host. However, pre-existing nTregs are neither required for the induction of Tregs nor measurably impact on the extent of their accumulation. Instead, induction of Ag-specific regulatory cells from naive cells is intrinsically influenced by the tumor microenvironment and the presence of tumor Ag.