Neuropilin-1 (Nrp1) is a multifunctional protein, identified principally as a receptor for the class 3 semaphorins and members of the vascular endothelial growth factor (VEGF) family, but it is capable of other interactions. It is a marker of regulatory T cells (Tr), which often carry Nrp1 and latency-associated peptide (LAP)-TGF-β1 (the latent form). The signaling TGF-β1 receptors bind only active TGF-β1, and we hypothesized that Nrp1 binds the latent form. Indeed, we found that Nrp1 is a high-affinity receptor for latent and active TGF-β1. Free LAP, LAP-TGF-β1, and active TGF-β1 all competed with VEGF₁₆₅ for binding to Nrp1. LAP has a basic, arginine-rich C-terminal motif similar to VEGF and peptides that bind to the b1 domain of Nrp1. A C-terminal LAP peptide (QSSRHRR) bound to Nrp1 and inhibited the binding of VEGF and LAP-TGF-β1. We also analyzed the effects of Nrp1/LAP-TGF-β1 coexpression on T cell function. Compared with Nrp1^– cells, sorted Nrp1⁺ T cells had a much greater capacity to capture LAP-TGF-β1. Sorted Nrp1^– T cells captured soluble Nrp1-Fc, and this increased their ability to capture LAP-TGF-β1. Conventional CD4⁺CD25^–Nrp1^– T cells coated with Nrp1-Fc/LAP-TGF-β1 acquired strong Tr activity. Moreover, LAP-TGF-β was activated by Nrp1-Fc and also by a peptide of the b2 domain of Nrp1 (RKFK; similar to a thrombospondin-1 peptide). Breast cancer cells, which express Nrp1, also captured and activated LAP-TGF-β1 in a Nrp1-dependent manner. Thus, Nrp1 is a receptor for TGF-β1, activates its latent form, and is relevant to Tr activity and tumor biology.