Immunosuppression mediated by regulatory T cells (Tregs) is a key facilitator of tumor immune evasion, but the source of these Tregs and their contribution to human cancer progression remains unclear. This study investigated the properties of FoxP3⁺ Tregs, their prognostic value in patients with hepatocellular carcinoma (HCC) and the underlying mechanisms of FoxP3⁺ Treg intratumoral accumulation. In addition to an increased number of circulating FoxP3⁺ Tregs, the results also showed that FoxP3⁺ Tregs gathered in the tumor site, where they suppressed tissue‐derived CD4⁺CD25⁻ T‐cell activation (p < 0.001), promoting disease progression and poor prognosis in HCC patients (< 0.01). The intratumoral prevalence of FoxP3⁺ Tregs was associated with a high density of macrophages (Mφ) (p < 0.001). Depletion of tissue Mφ thus attenuated the increase of liver FoxP3⁺ Treg frequency attributed to in vivo inoculation with hepatoma (p = 0.01), whereas Mφ exposed to tumor culture supernatants from hepatoma‐derived cell lines increased FoxP3⁺ Treg frequency in vitro (p < 0.001). This increase was partially blocked by antiinterleukin‐10 antibody (p < 0.01). In conclusion, tumor‐associated Mφ may trigger a rise of the intratumoral FoxP3⁺ Treg population, which in turn may promote HCC progression. © 2009 UICC