CD4⁺CD25⁺ regulatory T cells (Tregs) suppress immune responses to alloantigens. The in vivo circulation and tissue localization of Tregs during an adaptive immune response remain unclear. We noninvasively tracked luciferase-expressing Tregs over time in an allogeneic bone marrow transplant model and demonstrated colocalization with effector T cells and initial expansion in secondary lymphoid organs before migration into inflamed tissues. Inflammation induced by irradiation and the allogeneic setting provided crucial stimuli for early Treg expansion and migration, leading to parallel reduction of effector T-cell proliferation in lymphoid organs and peripheral tissues. Treg transplants conferred long-term protection from systemic inflammatory challenge consistent with Treg in vivo survival. Suppression occurred during multiple phases of inflammation, but is optimal in the initial phase, providing protection from graft-versus-host disease while maintaining the graft-versus-tumor effect even at physiologic doses of Tregs due to their in vivo expansion, hence overcoming a major barrier to potential clinical applications of Tregs given their rarity.