Regulatory T cell (T cell) therapy has been transformed through the use of chimeric antigen receptors (CARs). We previously found that human T cells minimally produce IL-10 and have a limited capacity to control innate immunity compared to type 1 regulatory T cells (T1 cells). To create "hybrid" CAR T cells with T1 cell-like properties, we examined whether the locus could be exploited to endow T cells with CAR-regulated IL-10 expression. CRISPR-mediated PD1 deletion increased CAR T cell activation, and knock-in of under control of the PD1 promoter resulted in CAR-induced IL-10 secretion. knock-in improved CAR T cell function, as determined by increased suppression of dendritic cells and alloantigen- and islet autoantigen-specific T cells. In vivo, knock-in CAR T cells were stable, safe, and suppressed dendritic cells and xenogeneic graft-versus-host disease. CRISPR-mediated engineering to simultaneously remove an inhibitory signal and enhance a suppressive mechanism is a previously unexplored approach to improve CAR T cell potency.