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The liver is an immune-privileged organ that can deactivate autoreactive T cells. Yet in autoimmune hepatitis (AIH), autoreactive T cells can defy hepatic control and attack the liver. To elucidate how tolerance to self-antigens is lost during AIH pathogenesis, we generated a spontaneous mouse model of AIH, based on recognition of an MHC class II–restricted model peptide in hepatocytes by autoreactive CD4+ T cells. We found that the hepatic peptide was not expressed in the thymus, leading to deficient thymic deletion and resulting in peripheral abundance of autoreactive CD4+ T cells. In the liver, autoreactive CD4+ effector T cells accumulated within portal ectopic lymphoid structures and maturated toward pathogenic IFN-γ and TNF coproducing cells. Expansion and pathogenic maturation of autoreactive effector T cells was enabled by a selective increase of plasticity and instability of autoantigen-specific Tregs but not of nonspecific Tregs. Indeed, antigen-specific Tregs were reduced in frequency and manifested increased IL-17 production, reduced epigenetic demethylation, and reduced expression of Foxp3. As a consequence, autoantigen-specific Tregs had a reduced suppressive capacity, as compared with that of nonspecific Tregs. In conclusion, loss of tolerance and the pathogenesis of AIH were enabled by combined failure of thymic deletion and peripheral regulation.