Anti-TNF treatment is effective in a majority of rheumatoid arthritis (RA), however, this treatment can unexpectedly trigger the onset or exacerbate multiple sclerosis (MS). Recent progress in cellular immunology research provides a new framework to analyze the possible mechanism underlying these puzzling contradictory effects. The delicate balance of protective CD4+FoxP3+ regulatory T cells (Tregs) and pathogenic CD4+FoxP3− effector T cells (Teffs) is crucial for the outcome of anti-TNF treatment of autoimmune disease. There is convincing evidence that TNF, in addition to stimulating Teffs, is able to activate and expand Tregs through TNFR2, which is preferentially expressed by Tregs. Therefore, the contrasting effects of TNF on Tregs and Teffs are likely to determine the therapeutic effect of anti-TNF treatment. In this review, we discuss the current understanding of the general effect of TNF on the activation of T cells, and the impact of TNF on the function of Teffs and Tregs. Understanding the differential effects of TNF on Teffs and Tregs is fundamentally required for the design of more effective and safer anti-TNF or antiTNF receptor(s) therapeutic strategy for autoimmune diseases.