Allergy is a Th2-mediated disease that involves the formation of specific IgE antibodies against innocuous environmental substances. The prevalence of allergic diseases has dramatically increased over the past decades, affecting up to 30% of the population in industrialized countries. The understanding of mechanisms underlying allergic diseases as well as those operating in non-allergic healthy responses and allergen-specific immunotherapy has experienced exciting advances over the past 15 years. Studies in healthy non-atopic individuals and several clinical trials of allergen-specific immunotherapy have demonstrated that the induction of a tolerant state in peripheral T cells represent a key step in healthy immune responses to allergens. Both naturally occurring thymus-derived CD4(+)CD25(+)FOXP3(+) Treg and inducible type 1 Treg inhibit the development of allergy via several mechanisms, including suppression of other effector Th1, Th2, Th17 cells; suppression of eosinophils, mast cells and basophils; Ab isotype change from IgE to IgG4; suppression of inflammatory DC; and suppression of inflammatory cell migration to tissues. The identification of the molecules involved in these processes will contribute to the development of more efficient and safer treatment modalities.