Regulatory T cells (Tregs) have crucial functions in the inhibition of immune responses. Their development and suppressive functions are controlled by the T cell receptor (TCR), but the TCR signaling mechanisms that mediate these effects remain ill-defined. Here we show that CARD11-BCL10-MALT1 (CBM) signaling mediates TCR-induced NF-kappa B activation in Tregs and controls the conversion of resting Tregs to effector Tregs under homeostatic conditions. However, in inflammatory milieus, cytokines can bypass the CBM requirement for this differentiation step. By contrast, CBM signaling, in a MALT1 protease-dependent manner, is essential for mediating the suppressive function of Tregs. In malignant melanoma models, acute genetic blockade of BCL10 signaling selectively in Tregs or pharmacological MALT1 inhibition enhances anti-tumor immune responses. Together, our data uncover a segregation of Treg differentiation and suppressive function at the CBM complex level, and provide a rationale to explore MALT1 inhibitors for cancer immunotherapy.