A balance between Th17 cells and regulatory T cells (Tregs) is important for host immunity and immune tolerance. The underlying molecular mechanisms remain poorly understood. Here we have identified Cdc42 as a central regulator of Th17/Treg balance. Deletion of Cdc42 in T cells enhanced Th17 differentiation but diminished induced Treg differentiation and suppressive function. Treg-specific deletion of Cdc42 decreased natural Tregs but increased effector T cells including Th17 cells. Notably, Cdc42-deficient Th17 cells became pathogenic associated with enhanced glycolysis and Cdc42-deficient Tregs became unstable associated with weakened glycolytic signaling. Inhibition of glycolysis in Cdc42-deficient Th17 cells diminished their pathogenicity and restoration of glycolysis in Cdc42-deficient Tregs rescued their instability. Intriguingly, Cdc42 deficiency in T cells led to exacerbated wasting disease in mouse models of colitis and Treg-specific deletion of Cdc42 caused early, fatal lymphoproliferative diseases. In summary, we show that Cdc42 is a bona fide regulator of peripheral tolerance through suppression of Th17 aberrant differentiation/pathogenicity and promotion of Treg differentiation/stability/function involving metabolic signaling and thus Cdc42 pathway might be harnessed in autoimmune disease therapy.