Type 1 regulatory T cells (Tr1 cells ) that produce interleukin 10 (IL-10) are instrumental in the prevention of tissue inflammation, autoimmunity and graft-versus-host disease. The transcription factor c-Maf is essential for the induction of IL-10 by Tr1 cells, but the molecular mechanisms that lead to the development of these cells remain unclear. Here we show that the ligand-activated transcription factor aryl hydrocarbon receptor (AhR), which was induced by IL-27, acted in synergy with c-Maf to promote the development of Tr1 cells. After T cell activation under Tr1-skewing conditions, the AhR bound to c-Maf and promoted transactivation of the Il10 and Il21 promoters, which resulted in the generation of Tr1 cells and the amelioration of experimental autoimmune encephalomyelitis. Manipulating AhR signaling could therefore be beneficial in the resolution of excessive inflammatory responses.