Hepatitis C virus (HCV) is remarkable at disrupting human immunity to establish chronic infection. Upregulation of inhibitory signaling pathways (such as T cell Ig and mucin domain protein-3 [Tim-3]) and accumulation of regulatory T cells (Tregs) play pivotal roles in suppressing antiviral effector T cell (Teff) responses that are essential for viral clearance. Although the Tim-3 pathway has been shown to negatively regulate Teffs, its role in regulating Foxp3(+) Tregs is poorly explored. In this study, we investigated whether and how the Tim-3 pathway alters Foxp3(+) Treg development and function in patients with chronic HCV infection. We found that Tim-3 was upregulated, not only on IL-2-producing CD4(+)CD25(+)Foxp3(-) Teffs, but also on CD4(+)CD25(+)Foxp3(+) Tregs, which accumulate in the peripheral blood of chronically HCV-infected individuals when compared with healthy subjects. Tim-3 expression on Foxp3(+) Tregs positively correlated with expression of the proliferation marker Ki67 on Tregs, but it was inversely associated with proliferation of IL-2-producing Teffs. Moreover, Foxp3+ Tregs were found to be more resistant to, and Foxp3(-) Teffs more sensitive to, TCR activation-induced cell apoptosis, which was reversible by blocking Tim-3 signaling. Consistent with its role in T cell proliferation and apoptosis, blockade of Tim-3 on CD4(+) CD25(+) T cells promoted expansion of Teffs more substantially than Tregs through improving STAT-5 signaling, thus correcting the imbalance of Foxp3(+) Tregs/Foxp3(-) Teffs that was induced by HCV infection. Taken together, the Tim-3 pathway appears to control Treg and Teff balance through altering cell proliferation and apoptosis during HCV infection. The Journal of Immunology, 2012, 189: 755-766.