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Autoimmune hepatitis (AIH) is an important cause of severe liver disease and is associated with both quantitative and qualitative regulatory T-cell (Treg) impairments. Tregs express CD39, an ectonucleotidase responsible for extracellular nucleotide hydrolysis, culminating in the production of immunosuppressive adenosine. Here, we describe multiple CD39pos Treg defects that potentially contribute to the impaired immunoregulation that is characteristic of AIH. We have examined the frequency and phenotype of CD39pos Tregs by flow cytometry and measured their ectonucleotidase activity. The capacity of CD4posCD25high, CD4posCD25highCD39pos, and CD4posCD25highCD39neg subsets to suppress both proliferation of effector T cells and interleukin (IL)-17 production was evaluated. In AIH, CD39pos Tregs are decreased in frequency, exhibit limited adenosine triphosphate/adenosine diphosphate hydrolysis activity, and fail to suppress IL-17 production by effector CD4 T cells. Moreover, these CD39pos Tregs display a more proinflammatory profile in AIH, which is characterized by elevated CD127 positivity, and a greater propensity to produce interferon-gamma or IL-17 upon challenge with proinflammatory stimuli. Conclusions: In AIH, CD39pos Tregs are decreased in number, fail to adequately hydrolyze proinflammatory nucleotides and do not efficiently suppress IL-17 production by effector CD4 T cells. CD39pos Tregs show plasticity and are unstable upon proinflammatory challenge, suggesting that defective immunoregulation in AIH might result not only from reduced Treg number and function, but also from increased conversion of Tregs into effector cells. (Hepatology 2014;59:1007–1015)