Multiple myeloma (MM) is characterized by the production of monoclonal immunoglobulin and is associated with suppressed uninvolved immunoglobulins and dysfunctional T-cell responses. The biologic basis of this dysfunction remains ill defined. Because T regulatory (T_reg) cells play an important role in suppressing normal immune responses, we evaluated the potential role of T_reg cells in immune dysfunction in MM. We observed a significant increase in CD4⁺CD25⁺ T cells in patients with monoclonal gammopathy of undetermined significance (MGUS) and in patients with MM compared with healthy donors (25% and 26%, respectively, vs 14%); however, T_reg cells as measured by FOXP3 expression are significantly decreased in patients with MGUS and MM compared with healthy donors. Moreover, even when they are added in higher proportions, T_reg cells in patients with MM and MGUS are unable to suppress anti-CD3–mediated T-cell proliferation. This decreased number and function of T_reg cells in MGUS and in MM may account, at least in part, for the nonspecific increase in CD4⁺CD25⁺ T cells, thereby contributing to dysfunctional T-cell responses.