This application relates to methods and compositions for inducing immune tolerance. Specifically, methods and uses of regulatory T cells (Treg) and associated compositions for the induction of immune tolerance are described. The methods and uses may be used to prevent transplant rejection, and in the treatment of diseases or conditions such as graft versus host disease, autoimmune disease and allergies. Also provided are transgenic mice that ubiquitously express FGL2 protein from which the Treg may be isolated.