Regulatory T (Treg) cells, driven by the Foxp3 transcription factor, are responsible for limiting autoimmunity and chronic inflammation. We showed that a well-characterized Foxp3gfp reporter mouse, which expresses an N-terminal GFP-Foxp3 fusion protein, is a hypomorph that causes profoundly accelerated autoimmune diabetes on a NOD background. Although natural Treg cell development and in vitro function are not markedly altered in Foxp3gfp NOD and C57BL/6 mice, Treg cell function in inflammatory environments was perturbed and TGF-β-induced Treg cell development was reduced. Foxp3gfp was unable to interact with the histone acetyltransferase Tip60, the histone deacetylase HDAC7, and the Ikaros family zinc finger 4, Eos, which led to reduced Foxp3 acetylation and enhanced K48-linked polyubiquitylation. Collectively this results in an altered transcriptional landscape and reduced Foxp3-mediated gene repression, notably at the hallmark IL-2 promoter. Loss of controlled Foxp3-driven epigenetic modification leads to Treg cell insufficiency that enables autoimmunity in susceptible environments. ► Foxp3gfp is a hypomorph that causes accelerated autoimmune diabetes in NOD mice ► Foxp3gfp causes nTreg cell insufficiency and impaired iTreg cell development ► Foxp3gfp has defective interaction with Tip60, HDAC7, and Eos ► Foxp3gfp causes altered Foxp3-dependent transcription and epigenetic modification