In autoimmune diseases such as rheumatoid arthritis (RA), regulatory T cells (Tregs) fail to constrain autoimmune inflammation; however, the reasons for this are unclear. We investigated T cell regulation in the RA joint. Tregs from RA synovial fluid suppressed autologous responder T cells; however, when compared with Tregs from healthy control peripheral blood, they were significantly less suppressive. Despite their reduced suppressive activity, Tregs in the RA joint were highly proliferative and expressed FOXP3, CD39, and CTLA-4, which are markers of functional Tregs. This suggested that the reduced suppression is due to resistance of RA synovial fluid responder T cells to Treg inhibition. CD161+ Th17 lineage cells were significantly enriched in the RA joint; we therefore investigated their relative susceptibility to Treg-mediated suppression. Peripheral blood CD161+ Th cells from healthy controls were significantly more resistant to Treg-mediated suppression, when compared with CD161-Th cells, and this was mediated through a STAT3-dependant mechanism. Furthermore, depletion of CD161+ Th cells from the responder T cell population in RA synovial fluid restored Treg-mediated suppression. In addition, CD161+ Th cells exhibited pathogenic features, including polyfunctional proinflammatory cytokine production, an ability to activate synovial fibroblasts, and to survive and persist in the inflamed and hypoxic joint. Because CD161+ Th cells are known to be enriched at sites of autoinflammation, our finding that they are highly proinflammatory and resistant to Treg-mediated suppression suggests an important pathogenic role in RA and other autoimmune diseases.