Pigment epithelium-derived factor (PEDF) is a widely expressed 50-kDa glycoprotein belonging to the serine protease inhibitor family, with well-established anti-inflammatory functions. Recently, we demonstrated the immunoregulatory role played by PEDF in dry eye disease (DED) by suppressing the maturation of antigen-presenting cells at the ocular surface following exposure to the desiccating stress. In this study, we evaluated the effect of PEDF on the immunosuppressive characteristics of regulatory T cells (Tregs), which are functionally impaired in DED. In the presence of PEDF, the in vitro cultures prevented proinflammatory cytokine (associated with type 17 helper T cells)-induced loss of frequency and suppressive phenotype of Tregs derived from normal mice. Similarly, PEDF maintained the in vitro frequency and enhanced the suppressive phenotype of Tregs derived from DED mice. On systemically treating DED mice with PEDF, moderately higher frequencies and significantly enhanced suppressive function of Tregs were observed in the draining lymphoid tissues, leading to the efficacious amelioration of the disease. Our results demonstrate that PEDF promotes the suppressive capability of Tregs and attenuates their type 17 helper T-cell-mediated dysfunction in DED, thereby playing a role in the suppression of DED.