Genome-wide association studies identifying hundreds of susceptibility loci for autoimmune diseases indicate that genes active in immune cells predominantly mediate risk. However, identification and functional characterization of causal variants remain challenging. Here, we focused on the immunomodulatory role of a protective variant of histone deacetylase 7 (HDAC7). This variant (rs148755202, HDAC7.p.R166H) was identified in a study of low-frequency coding variation in multiple sclerosis (MS). Through transcriptomic analyses, we demonstrate that wild-type HDAC7 regulates genes essential for the function of Foxp3+ regulatory T cells (Tregs), an immunosuppressive subset of CD4 T cells that is generally dysfunctional in patients with MS. Moreover, Treg-specific conditional hemizygous deletion of HDAC7 increased the severity of experimental autoimmune encephalitis (EAE), a mouse model of neuroinflammation. In contrast, Tregs transduced with the protective HDAC7 R166H variant exhibited higher suppressive capacity in an in vitro functional assay, mirroring phenotypes previously observed in patient samples. In vivo modeling of the human HDAC7 R166H variant by generation of a knock-in mouse model bearing an orthologous R150H substitution demonstrated decreased EAE severity linked to transcriptomic alterations of brain-infiltrating Tregs, as assessed by single-cell RNA sequencing. Our data suggest that dysregulation of epigenetic modifiers, a distinct molecular class associated with disease risk, may influence disease onset. Last, our approach provides a template for the translation of genetic susceptibility loci to detailed functional characterization, using in vitro and in vivo modeling.