IL-2 is crucial for the production of CD4(+)CD25(+) T regulatory (Treg) cells while important for the generation of effective T cell-mediated immunity. How to exploit the capacity of IL-2 to expand Treg cells, while restraining activation of T effector (Teff) cells, is an important and unanswered therapeutic question. Dexamethasone (Dex), a synthetic glucocorticoid steroid, has been reported to suppress IL-2-mediated activation of Teff cells and increase the proportion of Treg cells. Thus, we hypothesized that glucocorticoids may be useful as costimulants to amplify IL-2-mediated selective expansion of Treg cells. We show in this study that short-term simultaneous administration of Dex and IL-2 markedly expanded functional suppressive Foxp3(+)CD4(+)CD25(+) T cells in murine peripheral lymphoid tissues. In a myelin oligodendrocyte glycoprotein-induced experimental autoimmune encephalomyelitis (EAE) mouse model, we observed that splenic CD4(+)CD25(+) T cells failed to suppress the proliferation of CD4(+)CD25(-) T cells. Pretreatment with Dex/IL-2 remarkably increased the proportion of CD4(+)FoxP3(+) cells and partially restored the function of splenic CD4(+) CD25(+) T cells, and inhibited the development of EAE. Therefore, the combination of glucocorticoid and IL-2, two currently used therapeutics, may provide a novel approach for the treatment of autoimmune diseases, transplant rejection and graft-vs.-host disease.