T regulatory (Treg) cells expressing the transcription factor FoxP3 play a key role in protection against autoimmune disease. GFP-FoxP3 reporter mice have been used widely to study the induction, function and stability of both thymically- and peripherally-induced Treg cells. The N-terminal modification of FoxP3, however, affects its interaction with transcriptional co-factors; this can alter Treg cell development and function in certain self-antigen specific animal models. Interestingly, Treg cell function can be negatively or positively affected, depending on the nature of the model. In this study, we focused on the effect of the GFP-FoxP3 reporter on Treg cell development and function in the Tg4 mouse model. In this model, T cells express a transgenic T cell receptor (TCR) specific for the Myelin Basic Protein (MBP) peptide Ac1-9, making the animals susceptible to experimental autoimmune encephalomyelitis (EAE), a disease akin to multiple sclerosis in humans. Unlike diabetes-susceptible mice, Tg4 FoxP3(gfp) mice did not develop spontaneous autoimmune disease and did not demonstrate augmented susceptibility to induced disease. Concurrently, thymic generation of natural Treg cells was not negatively affected. The induction of FoxP3 expression in naive peripheral T cells was, however, significantly impaired as a result of the transgene. This study shows that the requirements for the interaction of FoxP3 with co-factors, which governs its regulatory ability, differ not only between natural and inducible Treg cells but also between animal models of diseases such as diabetes and EAE.