The role of FoxP3⁺CD4⁺ regulatory T (Treg) cells in HIV-1 disease in vivo is poorly understood due to the lack of a robust model. We report here that CD4⁺FoxP3⁺ T cells are developed in all lymphoid organs in humanized Rag2^−/−γC^−/− (DKO-hu HSC) mice and they display both Treg phenotype and Treg function. These FoxP3⁺ Treg cells are preferentially infected and depleted by a pathogenic HIV-1 isolate in HIV-infected DKO-hu HSC mice; and depletion of Treg cells is correlated with induction of their apoptosis in vivo. When CD4⁺CD25^+/hi Treg cells are depleted with the IL-2–toxin fusion protein (denileukin diftitox), HIV-1 infection is significantly impaired. This is demonstrated by reduced levels of productively infected cells in lymphoid organs and lower plasma viremia. Therefore, FoxP3⁺ Treg cells are productively infected and play an important role in acute HIV-1 infection in vivo. The DKO-hu HSC mouse will be a valuable model to study human Treg functions and their role in HIV-1 pathogenesis in vivo.