The mouse killer cell lectin‐like receptor G1 (KLRG1) is an inhibitory receptor known to be expressed on a subset of NK cells and antigen‐experienced CD8 T cells. Here, we have characterized expression of KLRG1 on CD4⁺ T cells from normal mice. While a polyclonal TCR repertoire suggests thymic origin of KLRG1⁺ CD4⁺ cells, KLRG1 expression was found to be restricted to peripheral CD4⁺ T cells. Based on phenotypic analyses, a minority of KLRG1⁺ CD4⁺ cells are effector/memory cells with a proliferative history. The majority of KLRG1⁺ CD4⁺ cells are, however, bona fide Treg cells that depend on IL‐2 and/or CD28 and express both FoxP3 and high levels of intracellular CD152. KLRG1‐expressing Treg are contained within the CD38⁺ subset but are only partially overlapping with the CD25⁺ CD4⁺ Treg subset. In functional assays, KLRG1⁺ CD4⁺ cells were anergic to TCR stimulation with respect to proliferation, and sorted KLRG1⁺ CD25⁺ CD4⁺ cells were equal or superior to KLRG1⁺ CD25^– CD4⁺ cells, which were more potent than KLRG1^– CD25⁺ CD4⁺ cells in suppressing responder cell proliferation. Together, our results demonstrate that KLRG1 expression defines novel and distinctive subsets of senescent effector/memory and potent regulatory CD4⁺ T cells.