Three major mucosal systems exist in the body, the oral-gastrointestinal, the respiratory and the genitourinary systems. In particular, the gastrointestinal (GI) tract contains the largest mucosal surface in the body and is the major port of entry for foreign antigens. Therefore, the gut immune system has to differentiate to tolerate dietary antigens and expel infectious and harmful pathogens. During the complex but well-orchestrated immune responses in the mucosal system, T cells play a pivotal role in both immunity and tolerance. Of many T cell subpopulations, CD4(+)CD25(+) T regulatory cells (Tregs) are instrumental in regulation of immune responses in mucosea. Among the multitude of cytokines and factors that are produced in the gut, Transforming Growth Factor-beta (TGF-beta) is probably the most important one in influencing mucosal T cell responses. The interaction and mutual regulation between TGF-beta and CD4(+)CD25(+) Tregs may be the key in maintaining the balance between T cell immunity and tolerance in mucosal system. In this article, we attempt to discuss both beneficial and detrimental effects of TGF-beta and Tregs on oral tolerance, mucosal inflammation and autoimmunity, colon cancer and HIV infection in the gut.