Previously we reported that TGF-beta has an important role in the generation and expansion of human "professional" CD4(+)CD25(+) regulatory T cells in the periphery that have a cytokine-independent mechanism of action. In this study we used low-dose staphylococcal enterotoxin to induce T cell-dependent Ab production. We report that TGF-beta induces activated CD4(+)CD25(-) T cells to become Th3 suppressor cells. While stimulating CD4(+) cells with TGF-beta modestly increased expression of CD25 and intracellular CTLA-4 in primary cultures, upon secondary stimulation without TGF-beta the total number and those expressing these markers dramatically increased. This expansion was due to both increased proliferation and protection of these cells from activation-induced apoptosis. Moreover, adding as few as 1% of these TGF-beta-primed CD4(+) T cells to fresh CD4(+) cells and B cells markedly suppressed IgG production. The inhibitory effect was mediated by TGF-beta and was also partially contact dependent. Increased TGF-beta production was associated with a decreased production of IFN-gamma and IL-10. Depletion studies revealed that the precursors of these TGF-beta-producing CD4(+) suppressor cells were CD25 negative. These studies provide evidence that CD4(+)CD25(+) regulatory cells in human blood consist of at least two subsets that have TGF-beta-dependent and independent mechanisms of action. TGF-beta has an essential role in the generation of both of these T suppressor cell subsets from peripheral T cells. The ability to induce CD4(+) and CD8(+) cells to become regulatory cells ex vivo has the potential to be useful in the treatment of autoimmune diseases and to prevent transplant rejection.