Thy-1 (CD90) on mouse T cells has been reported to have both T-cell activating and regulatory roles. In this study, we show that monoclonal antibody (mAb)-mediated crosslinking of Thy-1 on CD4(+) mouse T-cells-induced regulatory T (T(reg)) cells that expressed CD25, CD39 and glucocorticoid-induced tumor necrosis factor receptor family-related gene, but not CD73, CD122 or Foxp3. The proliferation of CD4(+) T(responder) cells in response to anti-CD3/anti-CD28mAb-coated T-cell expander beads or syngeneic dendritic cells and soluble anti-CD3mAb was inhibited by Thy-1-induced T(reg) cells, in spite of elevated IL-2 levels in the co-cultures. Interestingly, stimulation with T-cell expander beads caused Thy-1-induced T(reg) cells to synthesize large amounts of interleukin-2 (IL-2). IL-10 was also elevated in co-cultures of activated T(responder) cells and Thy-1-induced T(reg) cells. However, mAb-mediated neutralization of IL-10 did not restore T(responder)-cell proliferation to control levels, which excluded IL-10 as a potential mediator of Thy-1-induced T(reg)-cell suppressor function. In addition, Thy-1-induced T(reg) cells did not inhibit IL-2-dependent proliferation of CTLL-2 cells, suggesting that IL-2 receptor signaling remained intact in the presence of Thy-1-induced T(reg) cells. We suggest that T(reg) cells induced by Thy-1 ligation in vivo may contribute to the maintenance of T-cell homeostasis.