HIV-1 infection causes depletion and/or dysfunction of distinct CD4+ T cell subsets and may affect these differently. Using the CD4C/HIV-1Nef transgenic (Tg) mice as a model, we report that HIV-1 Nef causes depletion of total CD4+ T cells, but preserves and relatively enriches CD4+ regulatory T cells (Treg). We found that Nef-mediated CD4+ Treg enrichment is the direct result of Nef expression in CD4+ T cells, occurs independently of Nef-induced lymphopenia, and most likely results from multiple mechanisms: lower apoptosis, enhanced cell division, and increased generation from precursors. Interestingly, Tg Treg relative enrichment could be reversed by enhancing Lck activity. Most importantly, we show that, in contrast to Tg helper CD4+ T cells that have lost their function, Nef-expressing CD4+ Treg retain their regulatory function in vitro and also in vivo, under some settings. In particular, we found that Treg prevent expansion of Tg B and non-Treg T cells in vivo. Our study reveals that Nef affects distinct CD4+ T cell subsets differently and uncovers the high proliferative potential of B and non-Treg T cells in this mouse model.