CD4⁺CD25^high regulatory T cells (Tregs) play a critical role in self‐tolerance, as seen in murine autoimmunity. Studies on Tregs in human autoimmunity have focused primarily on peripheral blood samples. A study targeting diseased tissue should identify direct relationships between Tregs and autoimmunity. Peripheral blood samples were collected from 91 patients with primary biliary cirrhosis (PBC), 28 immediate relatives, and 41 healthy controls, and Treg frequencies were determined as a percentage of CD4⁺CD25^high T cells in CD4⁺TCR‐αβ⁺ T cells. A tissue‐targeted determination of frequency and distribution of FoxP3⁺ Tregs was also performed on 90 different liver tissue specimens exhibiting PBC (n = 52), chronic hepatitis C (CHC) (n = 30), and autoimmune hepatitis (AIH) (n = 8). Treg suppression studies were performed on 50 PBC patients and 27 controls. Patients with PBC demonstrated a relative reduction of Tregs compared with controls (P < .0002). Interestingly, a deficiency in CD4⁺CD25⁺ Tregs was also found in the daughters and sisters of PBC patients compared with controls (P < .0007). However, functional studies did not reveal a global PBC Treg defect. The level of FoxP3‐expressing Tregs was markedly lower in affected PBC portal tracts compared with CHC and AIH (P < .001). In addition, the CD8⁺T cell/FoxP3⁺ Treg ratio was significantly higher in livers of late‐stage PBC compared with those of CHC (P < .001) and early‐stage AIH (P < .001). In conclusion, these data provide support for a genetic modulation of Treg frequency and illustrate the role Tregs play in the loss of tolerance in PBC. (HEPATOLOGY 2006;43:729–737.)