Therapeutic regulatory T cells (Tregs) can reverse pre-established autoimmune pathology. In this study, using a mouse model of autoimmune diabetes, we aimed to determine the means by which therapeutic Tregs control islet inflammation. Islet Ag-specific Tregs infiltrated inflamed islets soon after infusion into prediabetic mice, which was quickly followed by a selective reduction of mRNA associated with effector T cells in the islets. This change was partially due to decreased CD8+ T cell accumulation in the tissue. CD8+ T cells that remained in the islets after Treg treatment were able to engage dendritic cells in a manner similar to that found in untreated mice, consistent with the retention of an activated phenotype by islet dendritic cells shortly after Treg treatment. Nonetheless, Treg treatment abrogated IFN-γ production by intraislet CD8+ and CD4+ T cells at the protein level with minimal effect on IFN-γ mRNA. Sustained expression of IFN-γ protein by effector T cells was dependent on common γ-chain cytokine activation of the mTOR pathway, which was suppressed in islet CD8+ T cells in vivo after Treg treatment. These multifaceted mechanisms underlie the efficacy of therapeutic Treg subversion of effector T cell functions at the site of inflammation to restore normal tissue homeostasis.