The local environment may affect the development and function of tissue-resident T regulatory cells (Tregs), which are crucial for controlling inflammation. Although the aryl hydrocarbon receptor (Ahr), an environmental sensor, is expressed by Tregs, its role in Treg cell development and/or function remains elusive. Here, we generated mouse genetic models to ablate or activate Ahr expression specifically in Tregs. We showed that Ahr was expressed more abundantly by peripherally induced Tregs (pTregs) in the gut and that its expression was independent of microbiota. Ahr was important for Treg gut homing and function. Ahr inhibited pro-inflammatory cytokines produced by Tregs but was dispensable for Treg stability. Furthermore, Ahr-expressing Tregs had enhanced in vivo suppressive activity compared with Tregs lacking Ahr expression in a T cell transfer model of colitis. Our data suggest that Ahr signaling in Tregs may be important for gut immune homeostasis.