Naturally occurring CD4+CD25+ regulatory T cells (Tregs), which play an important role in the maintenance of self-tolerance, proliferate poorly and fail to produce IL-2 following stimulation in vitro with peptide-pulsed or anti-CD3-treated APCs. When TCR proximal and distal signaling events were examined in Tregs, we observed impairments in the amplitude and duration of tyrosine phosphorylation when compared with the response of CD4+CD25− T cells. Defects were also seen in the activity of phospholipase C-γ and in signals downstream of this enzyme including calcium mobilization, NFAT, NF-κB, and Ras-ERK-AP-1 activation. Enhanced stimulation of diacylglycerol-dependent pathways by inhibition of diacylglycerol metabolism could overcome the “anergic state” and support the ability of Tregs to up-regulate CD69, produce IL-2, and proliferate. Our results demonstrate that Tregs maintain their hyporesponsive state by suppressing the induction and propagation of TCR-initiated signals to control the accumulation of second messengers necessary for IL-2 production and proliferation.