We have previously demonstrated that Lactobacillus paracasei NCC2461 may help to prevent cow's milk allergy in mice by inducing oral tolerance to beta-lactoglobulin (BLG). To investigate the mechanisms involved in this beneficial effect, we examined the possibility that L. paracasei induces tolerance by hydrolyzing BLG-derived peptides and liberating peptides that stimulate interleukin-10 (IL-10) production. L. paracasei peptidases have been shown to hydrolyze tryptic-chymotryptic peptides from BLG, releasing numerous small peptides with immunomodulating properties. We have now shown that acidic tryptic-chymotryptic peptides stimulate splenocyte proliferation and gamma interferon (IFN-gamma) production in vitro. Hydrolysis of these peptides with L. paracasei peptidases repressed the lymphocyte stimulation, up-regulated IL-10 production, and down-regulated IFN-gamma and IL-4 secretion. L. paracasei NCC2461 may therefore induce oral tolerance to BLG in vivo by degrading acidic peptides and releasing immunomodulatory peptides stimulating regulatory T cells, which function as major immunosuppressive agents by secreting IL-10.