Human regulatory T cells (Treg) suppress other immune cells. Their dysfunction contributes to the pathophysiology of autoimmune diseases, including type 1 diabetes (T1D). Infusion of Tregs is being clinically evaluated as a novel way to prevent or treat T1D. Genetic modification of Tregs, most notably through the introduction of a chimeric antigen receptor (CAR) targeting Tregs to pancreatic islets, may improve their efficacy. We evaluated CAR targeting of human Tregs to monocytes, a human β cell line and human islet β cells in vitro. Targeting of HLA-A2-CAR (A2-CAR) bulk Tregs to HLA-A2+ cells resulted in dichotomous cytotoxic killing of human monocytes and islet β cells. In exploring subsets and mechanisms that may explain this pattern, we found that CD39 expression segregated CAR Treg cytotoxicity. CAR Tregs from individuals with more CD39low/- Tregs and from individuals with genetic polymorphism associated with lower CD39 expression (rs10748643) had more cytotoxicity. Isolated CD39- CAR Tregs had elevated granzyme B expression and cytotoxicity compared to the CD39+ CAR Treg subset. Genetic overexpression of CD39 in CD39low CAR Tregs reduced their cytotoxicity. Importantly, β cells upregulated protein surface expression of PD-L1 and PD-L2 in response to A2-CAR Tregs. Blockade of PD-L1/PD-L2 increased β cell death in A2-CAR Treg co-cultures suggesting that the PD-1/PD-L1 pathway is important in protecting islet β cells in the setting of CAR immunotherapy. In summary, introduction of CAR can enhance biological differences in subsets of Tregs. CD39+ Tregs represent a safer choice for CAR Treg therapies targeting tissues for tolerance induction.