Regulatory T cells (Tregs) and the PD-1: PD-ligand (PD-L) pathway are both critical to terminating immune responses. Elimination of either can result in the breakdown of tolerance and the development of autoimmunity. The PD-1: PD-L pathway can thwart self-reactive T cells and protect against autoimmunity in many ways. In this review, we highlight how PD-1 and its ligands defend against potentially pathogenic self-reactive effector T cells by simultaneously harnessing two mechanisms of peripheral tolerance: (i) the promotion of Treg development and function and (ii) the direct inhibition of potentially pathogenic self-reactive T cells that have escaped into the periphery. Treg cells induced by the PD-1 pathway may also assist in maintaining immune homeostasis, keeping the threshold for T-cell activation high enough to safeguard against autoimmunity. PD-L1 expression on non-hematopoietic cells as well as hematopoietic cells endows PD-L1 with the capacity to promote Treg development and enhance Treg function in lymphoid organs and tissues that are targets of autoimmune attack. At sites where transforming growth factor-beta is present (e.g. sites of immune privilege or inflammation), PD-L1 may promote the de novo generation of Tregs. When considering the consequences of uncontrolled immunity, it would be therapeutically advantageous to manipulate Treg development and sustain Treg function. Thus, this review also discusses how the PD-1 pathway regulates a number of autoimmune diseases and the therapeutic potential of PD-1: PD-L modulation.