Hepatocellular carcinoma (HCC) is the fifth most common cancer worldwide with a poor prognosis and one for which immunotherapy remains a viable option. Experimental tumor models have shown that regulatory T cells, a functionally unique subset of T cells, can suppress effective antitumor immune responses. This suppression might explain the poor outcome of some of the immunotherapy protocols currently being used. A better understanding of the role of regulatory T cells in HCC is important for design of future immunotherapy-based clinical protocols. We have studied regulatory T cells from 84 patients with HCC and 74 controls, including healthy donors, patients with chronic hepatitis B virus and hepatitis C virus infection and nonviral liver cirrhosis. Regulatory T cells were identified by fluorescence-activated cell sorting using a panel of antibodies and by real-time PCR analysis for Foxp3 expression. Functional studies were done to analyze their inhibitory role. Finally, regulatory T cells were analyzed in tumors and ascites from patients with HCC. Patients with HCC have increased numbers of CD4+CD25+ regulatory T cells in their peripheral blood, which express high levels of HLA-DR, GITR, and low or no CD45RA. These cells were anergic toward T-cell receptor stimulation and, when cocultured with activated CD4+CD25- cells, potently suppressed their proliferation and cytokine secretion. There were also high numbers of regulatory T cells in tumor-infiltrating lymphocytes of HCC patients comparable with the increase in their peripheral blood. Our data suggest that the increase in frequency of regulatory T cells might play a role in modulation of the immune response against HCC and could be important in design of immunotherapeutic approaches.