Uncommitted (naive) murine CD4⁺ T helper cells (Thp) can be induced to differentiate towards T helper 1 (Th1), Th2, Th17 and regulatory (T_reg) phenotypes according to the local cytokine milieu. This can be demonstrated most readily both in vitro and in vivo in murine CD4⁺ T cells. The presence of interleukin (IL)-12 [signalling through signal transduction and activator of transcription (STAT)-4] skews towards Th1, IL-4 (signalling through STAT-6) towards Th2, transforming growth factor (TGF)-β towards T_reg and IL-6 and TGF-β towards Th17. The committed cells are characterized by expression of specific transcription factors, T-bet for Th1, GATA-3 for Th2, forkhead box P3 (FoxP3) for T_regs and RORγt for Th17 cells. Recently, it has been demonstrated that the skewing of murine Thp towards Th17 and T_reg is mutually exclusive. Although human Thp can also be skewed towards Th1 and Th2 phenotypes there is as yet no direct evidence for the existence of discrete Th17 cells in humans nor of mutually antagonistic development of Th17 cells and T_regs. There is considerable evidence, however, both in humans and in mice for the importance of interferon (IFN)-γ and IL-17 in the development and progression of inflammatory and autoimmune diseases (AD). Unexpectedly, some models of autoimmunity thought traditionally to be solely Th1-dependent have been demonstrated subsequently to have a non-redundant requirement for Th17 cells, notably experimental allergic encephalomyelitis and collagen-induced arthritis. In contrast, T_regs have anti-inflammatory properties and can cause quiescence of autoimmune diseases and prolongation of transplant function. As a result, it can be proposed that skewing of responses towards Th17 or Th1 and away from T_reg may be responsible for the development and/or progression of AD or acute transplant rejection in humans. Blocking critical cytokines in vivo, notably IL-6, may result in a shift from a Th17 towards a regulatory phenotype and induce quiescence of AD or prevent transplant rejection. In this paper we review Th17/IL-17 and T_reg biology and expand on this hypothesis.