The efficacy of live Mycobacterium bovis BCG as a tuberculosis vaccine is highly varied globally. Differential sensitization to environmental mycobacteria prior to BCG vaccination may prime immune effects leading to this variation, but the precise immune mechanisms and cell types involved in this phenomenon are unknown. We hypothesized that pre-vaccination sensitization to environmental mycobacteria induces mycobacterium-specific Tregs that suppress responses to BCG. This was investigated by testing Treg responses following priming of BALB/c mice by i.p. immunization with heat-killed CHE. Such mice produced higher levels of IL-10 before and after intranasal, live BCG administration and had fewer lung inflammatory cells post-BCG, relative to nonsensitized mice. In CHE-sensitized mice, the percentage of splenic CD4+CD25+ cells expressing Foxp3 amongst total lymphocytes was not elevated significantly, but these cells limited nonspecific proliferation of CD4+CD25⁻ effector cells upon coculture and promoted higher expression levels of CD103 and Foxp3 in response to BCG antigen stimulation than CD4+CD25+ cells from nonsensitized mice. In adoptive transfer experiments, naïve, WT mice receiving CD4+CD25+ cells from CHE-sensitized mice and then given live BCG intranasally had significantly elevated lung IL-10 levels, reduced frequencies of lung IL-2-producing cells, and lower lymphocyte numbers in the BAL. Therefore, CHE sensitization induced CD4+CD25+ Tregs with functional, suppressive activity on BCG responses in vitro and in vivo. Treg induction could therefore be one mechanism underlying how environmental mycobacteria priming modulates host responses to the BCG vaccine.