Regulatory T cells (Tregs) play a cardinal role in the immune system by suppressing detrimental autoimmune responses, but their role in acute, chronic infectious diseases and tumor microenvironment remains unclear. We recently demonstrated that IFN-α/β receptor (IFNAR) signaling promotes Treg function in autoimmunity. Here we dissected the functional role of IFNAR-signaling in Tregs using Treg-specific IFNAR deficient (IFNAR^fl/flxFoxp3^YFP-Cre) mice in acute LCMV Armstrong, chronic Clone-13 viral infection, and in tumor models. In both viral infection and tumor models, IFNAR^fl/flxFoxp3^YFP-Cre mice Tregs expressed enhanced Treg associated activation antigens. LCMV-specific CD8⁺ T cells and tumor infiltrating lymphocytes from IFNAR^fl/flxFoxp3^YFP-Cre mice produced less antiviral and antitumor IFN-γ and TNF-α. In chronic viral model, the numbers of antiviral effector and memory CD8⁺ T cells were decreased in IFNAR^fl/flxFoxp3^YFP-Cre mice and the effector CD4⁺ and CD8⁺ T cells exhibited a phenotype compatible with enhanced exhaustion. IFNAR^fl/flxFoxp3^YFP-Cre mice cleared Armstrong infection normally, but had higher viral titers in sera, kidneys and lungs during chronic infection, and higher tumor burden than the WT controls. The enhanced activated phenotype was evident through transcriptome analysis of IFNAR^fl/flxFoxp3^YFP-Cre mice Tregs during infection demonstrated differential expression of a unique gene signature characterized by elevated levels of genes involved in suppression and decreased levels of genes mediating apoptosis. Thus, IFN signaling in Tregs is beneficial to host resulting in a more effective antiviral response and augmented antitumor immunity. Type I interferons (IFNs) play a predominant role in the immune response to infectious pathogens. The cellular targets of IFNs have been difficult to dissect because of the ubiquitous expression of the type I interferon receptor (IFNAR). The immune response of mice to lymphocytic choriomeningitis virus (LCMV) is one of the major models for analyzing the action of IFNs. Regulatory T cells (Tregs) have been implicated in the control of LCMV and it has been proposed that IFN may influence their function. The major goal of this study was to define the contribution of IFN signaling on Treg function during different stages LCMV infection. Tregs from mice with selective deletion of IFNAR manifested enhanced suppressive activity during acute/chronic LCMV infection resulting in increased CD8 T cell anergy, defective generation of memory T cells and persistence of virus. Similar effects of IFNAR signaling in Tregs were seen in a tumor model. We identified a unique set of genes in Tregs modulated by IFN signaling that may contribute to the enhanced suppressive function of IFNAR deficient Tregs. IFNs play a beneficial role during acute/chronic viral infections not only by contributing to viral clearance but also by attenuating the function of Tregs.