The nuclear receptor Liver X Receptor (LXR) is a ligand-activated transcription factor that has been implicated in control of chronic inflammation by downregulating pro-inflammatory T cell responses. An impaired function of regulatory T cells, a subset of CD4+ T cells with a crucial role in maintaining lymphocytes homeostasis and immune regulation, is frequently observed in chronic inflammatory diseases. We observed that pharmacological activation of LXR in T cells not only resulted in a thorough suppression of Th1 and Th17 polarization in vitro, but also significantly induced regulatory T cells (Treg) cell differentiation in a receptor-specific fashion. In line with this, systemic LXR activation by oral treatment of mice with the LXR agonist GW3965 induced gut-associated regulatory T cells in vivo. Importantly, such LXR-activated Tregs had a higher suppressive capacity in functional in vitro coculture assays with effector T cells. Our data thus point towards a dual role of LXR-mediated control of inflammation by suppression of pro-inflammatory T cells and reciprocal induction of regulatory T cells.