Clonal deletion and clonal anergy are well established mechanisms of peripheral tolerance. A role has also been described for clonal suppression by regulatory cells in the induction of peripheral tolerance to a variety of antigens. However, it has been difficult to isolate regulatory cells and to define their mechanism of action. We have recently reported the in vitro generation and characterization of a novel subset of CD4(+) T cells that have regulatory properties and are able to suppress antigen-specific immune responses in vitro and in vivo. These T-regulatory 1 (Tr1) cells are defined by their unique profile of cytokine production and make high levels of IL-10 and TGF-beta, but no IL-4 or IL-2. The IL-10 and TGF-beta produced by these cells mediate the inhibition of primary naive T cells in vitro. There is also evidence that Tr1 cells exist in vivo, and we have documented the presence of high IL-10-producing CD4(+) T cells in patients with severe combined immunodeficiency who have received allogeneic stem-cell transplants. These findings support the notion that Tr1 cells are involved in the regulation of peripheral tolerance and that they could potentially be used as a cellular therapy to modulate immune responses in vivo.