Maintenance of tissue homeostasis is dependent on the communication between stem cells and supporting cells in the same niche. Regulatory T cells (Treg cells) are emerging as a critical component of the stem-cell niche for supporting their differentiation. How Treg cells sense dynamic signals in this microenvironment and communicate with stem cells is mostly unknown. In the present study, by using hair follicles (HFs) to study Treg cell–stem cell crosstalk, we show an unrecognized function of the steroid hormone glucocorticoid in instructing skin-resident Treg cells to facilitate HF stem-cell (HFSC) activation and HF regeneration. Ablation of the glucocorticoid receptor (GR) in Treg cells blocks hair regeneration without affecting immune homeostasis. Mechanistically, GR and Foxp3 cooperate in Treg cells to induce transforming growth factor β3 (TGF-β3), which activates Smad2/3 in HFSCs and facilitates HFSC proliferation. The present study identifies crosstalk between Treg cells and HFSCs mediated by the GR–TGF-β3 axis, highlighting a possible means of manipulating Treg cells to support tissue regeneration.