There has been considerable recent progress in the characterization of the regulatory T cells that mediate tolerance in a number of transplantation models. The conditions that facilitate the generation of regulatory T cells point to the thymus, the nature of immune suppression and the dose of immunosuppressive agent(s) being important. Putative mechanisms of immune regulation by regulatory T cells, particularly in the 'infectious' tolerance pathway, include Th2-type cytokines (IL-4, IL-10 and transforming growth factor beta) that may play a direct role as an indispensable requirement or may contribute indirectly as a favorable milieu for acquisition of tolerance. Anergic T cells may suppress immune responses via either cytokine competition or antigen-presenting cells. Models of autoimmune disease, in which regulatory T cells were shown to represent a distinct thymus-derived T cell subset, also suggest the role of antigen-presenting cells in mediating immune suppression. Progress has also been made in generating and characterizing regulatory T cells in vitro.