CD4(+)FOXP3(+) regulatory T (Treg) cells are essential for maintaining immunological self-tolerance. Treg cell development and function depend on the transcription factor FOXP3, which is present in several distinct isoforms due to alternative splicing. Despite the importance of FOXP3 in the proper maintenance of Treg cells, the regulation and functional consequences of FOXP3 isoform expression remains poorly understood. Here, we show that in human Treg cells IL-1β promotes excision of FOXP3 exon 7. FOXP3 is not only expressed by Treg cells but is also transiently expressed when naïve T cells differentiate into Th17 cells. Forced splicing of FOXP3 into FOXP3Δ2Δ7 strongly favored Th17 differentiation in vitro. We also found that patients with Crohn's disease express increased levels of FOXP3 transcripts lacking exon 7, which correlate with disease severity and IL-17 production. Our results demonstrate that alternative splicing of FOXP3 modulates T cell differentiation. These results highlight the importance of characterizing FOXP3 expression on an isoform basis and suggest that immune responses may be manipulated by modulating the expression of FOXP3 isoforms, which has broad implications for the treatment of autoimmune diseases.