IL-27–induced type 1 regulatory T (Tr1) cells suppress autoimmunity by producing IL-10. Signal transducer and activator of transcription (STAT) 1 and STAT3 have been described as key transcription factors that promote IL-10 secretion from Tr1 cells induced by IL-27. However, the molecular pathways for negatively regulating Tr1 cell differentiation remain elusive. Here, we show that IL-27 induces metallothioneins (MTs) that in turn prevent Tr1 cell development. MT expression leads to the reduction of STAT1 and STAT3 phosphorylation under Tr1 differentiation condition, resulting in impaired IL-10 production. Accordingly, Tr1 cells derived from MT-deficient mice showed an increased ability to produce IL-10 and potently suppress experimental autoimmune encephalomyelitis upon adoptive transfer. Moreover, activation of STAT1 and/or STAT3 can overcome the suppression of IL-10 by MTs, indicating a dynamic balance between STATs and MTs in regulating IL-10 during Tr1 cell differentiation.