The imbalance between pathogenic and protective T cell subsets is a cardinal feature of autoimmune disorders such as multiple sclerosis (MS). Emerging evidence indicates that endogenous and dietary-induced changes in fatty acid metabolism have a major impact on both T cell fate and autoimmunity. To date, however, the molecular mechanisms that underlie the impact of fatty acid metabolism on T cell physiology and autoimmunity remain poorly understood. Here, we report that stearoyl-CoA desaturase-1 (SCD1), an enzyme essential for the desaturation of fatty acids and highly regulated by dietary factors, acts as an endogenous brake on regulatory T-cell (Treg) differentiation and augments autoimmunity in an animal model of MS in a T cell-dependent manner. Guided by RNA sequencing and lipidomics analysis, we found that the absence ofScd1in T cells promotes the hydrolysis of triglycerides and phosphatidylcholine through adipose triglyceride lipase (ATGL). ATGL-dependent release of docosahexaenoic acid enhanced Treg differentiation by activating the nuclear receptor peroxisome proliferator-activated receptor gamma. Our findings identify fatty acid desaturation by SCD1 as an essential determinant of Treg differentiation and autoimmunity, with potentially broad implications for the development of novel therapeutic strategies and dietary interventions for autoimmune disorders such as MS.