Activation of T cells through the engagement of the T cell receptors (TCRs) with specific peptide-MHC complexes on antigen presenting cells (APCs) is the major determinant for their proliferation, differentiation and display of effector functions. To assess the role of quantity and quality of peptide-MHC presentation in eliciting T cell activation and suppression functions, we genetically engineered human T cells with two TCRs that recognize HLA-A*0201-restricted peptides derived from either HIV or melanoma antigens. The engineered-TCRs are highly functional in both CD8(+) and CD4(+) T cells as assessed by the upregulation of activation markers, induction of cytokine secretion and cytotoxicity. We further demonstrated that engineered-TCRs can also be expressed on naïve human T cells, which are stimulated through APCs presenting specific peptides to induce T cell proliferation and acquire effector functions. Furthermore, regulatory T cells (Tregs) ectopically expressing the engineered-TCRs are activated in an antigen-specific fashion and suppress T cell proliferation. In this system, the inhibitory activity of peptide-stimulated Tregs require the presence of dendritic cells (DCs) in the culture, either as presenters or as bystander cells, pointing to a critical role for DCs in suppression by Tregs. In conclusion, the engineered-TCR system reported here advances our ability to understand the differentiation pathways of naïve T cells into antigen-specific effector cells and the role of antigen-specific signaling in Treg-mediated immune suppression.