Foxp3+ CD4+ regulatory T (Treg) cells inhibit immune responses and temper inflammation. IL-17+ CD4+ T (Th17) cells mediate inflammation of autoimmune diseases. A small population of IL-17+ Foxp3+ CD4+ T cells has been observed in peripheral blood in healthy human beings. However, the biology of IL-17+ Foxp3+ CD4+ T cells remains poorly understood in humans. We investigated their phenotype, cytokine profile, generation, and pathological relevance in patients with ulcerative colitis. We observed that high levels of IL-17+ Foxp3+ CD4+ T cells were selectively accumulated in the colitic microenvironment and associated colon carcinoma. The phenotype and cytokine profile of IL-17+ Foxp3+ CD4+ T cells was overlapping with Th17 and Treg cells. Myeloid APCs, IL-2, and TGF-β are essential for their induction from memory CCR6+ T cells or Treg cells. IL-17+ Foxp3+ CD4+ T cells functionally suppressed T cell activation and stimulated inflammatory cytokine production in the colitic tissues. Our data indicate that IL-17+ Foxp3+ cells may be “inflammatory” Treg cells in the pathological microenvironments. These cells may contribute to the pathogenesis of ulcerative colitis through inducing inflammatory cytokines and inhibiting local T cell immunity, and in turn may mechanistically link human chronic inflammation to tumor development. Our data therefore challenge commonly held beliefs of the anti-inflammatory role of Treg cells and suggest a more complex Treg cell biology, at least in the context of human chronic inflammation and associated carcinoma.