Effective cellular immunity to Epstein-Barr virus (EBV), necessary to prevent or cure many post-transplant lymphoproliferative disorders (PTLD), can be inhibited by transforming growth factor-beta (TGF-beta). In vitro, TGF-beta inhibits memory CTL re-stimulation from whole PBMC. We show that the effect of TGF-beta on CTL re-stimulation is not directly on the T cell, but requires an accessory cell (AC) population. Further, pre-treatment of AC with TGF-beta significantly reduces memory CTL re-stimulation and suppresses delayed type hypersensitivity (DTH) responses. Addition of exogenous interferon-gamma to the AC overcomes the effects of TGF-beta. TGF-beta pre-treatment also up-regulates expression of peroxisome-proliferator-activated receptor-gamma (PPAR-gamma) in CD14(+) AC. Importantly, pre-treatment of AC with the PPAR-gamma ligand, ciglitazone, results in significantly reduced memory CTL re-stimulation. Thus, the effects of TGF-beta in this system may be mediated in part via PPAR-gamma, and PPAR-gamma activation could have significant inhibitory effects on memory T-cell responses by affecting AC function. These data have important implications in understanding how memory CTL are re-stimulated and function to prevent disease, especially PTLD.