A lack of regulatory T cell function is a critical factor in the pathogenesis of autoimmune diseases, such as multiple sclerosis (MS). Ligation of the complement regulatory protein CD46 facilitates the differentiation of T helper 1 (TH1) effector cells into interleukin-10 (IL-10)–secreting type 1 regulatory T cells (Tr1 cells), and this pathway is defective in MS patients. Cleavage of the ectodomain of CD46, which contains three N-glycosylation sites and multiple O-glycosylation sites, enables CD46 to activate T cells. We found that stimulation of the T cell receptor (TCR)–CD3 complex was associated with a reduction in the apparent molecular mass of CD46 in a manner that depended on O-glycosylation. CD3-stimulated changes in CD46 O-glycosylation status reduced CD46 processing and subsequent T cell signaling. During T cell activation, CD46 was recruited to the immune synapse in a manner that required its serine-, threonine-, and proline-rich (STP) region, which is rich in O-glycosylation sites. Recruitment of CD46 to the immune synapse switched T cells from producing the inflammatory cytokine interferon-γ (IFN-γ) to producing IL-10. Furthermore, CD4+ T cells isolated from MS patients did not exhibit a CD3-stimulated reduction in the mass of CD46 and thus showed increased amounts of cell surface CD46. Together, these data suggest a possible mechanism underlying the regulatory function of CD46 on T cells. Our findings may explain why this pathway is defective in patients with MS and provide insights into MS pathogenesis that could help to design future immunotherapies.