Modulation of regulatory T cell (Treg) suppression has important implications for vaccine development, the effectiveness of tumor surveillance, and the emergence of autoimmunity. We have previously shown that the cytokine IL-21 can counteract Treg suppression. However, whether this reflects an effect of IL-21 on Treg, conventional T cells, or antigen-presenting cells is not known. Here we have used lymphocyte populations from IL-21R-deficient mice to pinpoint which cell type needs to be targeted by IL-21 for Treg suppression to be overcome. We show that IL-21 counteracts suppression by acting on conventional T cells and that this is associated with inhibition of IL-2 production. Despite the lack of IL-2, conventional T-cell responses proceed unimpaired because IL-21 can substitute for IL-2 as a T cell growth factor. However, IL-21 is unable to substitute for IL-2 in supporting the Treg compartment. Thus, IL-21 signaling in conventional T cells indirectly impacts Treg homeostasis by decreasing IL-2 availability. These data demonstrate that IL-21 and IL-2 can have overlapping roles in promoting conventional T-cell responses but play distinct roles in controlling Treg homeostasis and function. The data also suggest a new paradigm whereby cytokines can promote immunity by inhibiting IL-2.