The self-reactive T cells that escape clonal deletion in the thymus must be suppressed by the less well characterized process of peripheral tolerance. In this study, we show that monocyte-derived macrophages (M phi) undergoing terminal differentiation in the presence of macrophage CSF (M-CSF) acquire the ability to selectively induce apoptosis of T cells in an activation-specific fashion. Lymphocytes were stimulated via the TCR using anti-CD3 cross-linking, staphylococcal superantigen, or allogeneic mixed-leukocyte cultures. T cells activated while in contact with M-CSF-derived M phi exited the resting G0 state and re-entered the cell cycle, but experienced a sustained arrest near the first G1/S transition, followed by progressive apoptosis. In contrast, lymphocytes that were not stimulated remained viable, and could later activate normally when removed from contact with M phi. Functionally, exposure of T cells to alloantigens presented by M-CSF-derived M phi resulted in a selective depletion of the alloresponsive T cell population, while preserving reactivity to other mitogens and to alloantigens from different donors. The ability of M phi to impose activation-induced apoptosis on lymphocytes was regulated developmentally, being absent in fresh monocytes, progressively acquired during differentiation in M-CSF, and abrogated if monocytes were exposed to IFN-gamma before differentiation. We speculate that this novel interaction may help to selectively delete autoreactive T cells that respond to self Ags presented by noninflammatory tissue M phi.