Deficient T cell regulation can be mechanistically associated with development of chronic autoimmune diseases. Therefore, combining the regulatory properties of IL-10 and the specificity of autoreactive CD4(+) T cells through adoptive cellular gene transfer of IL-10 via autoantigen-specific CD4(+) T cells seems an attractive approach to correct such deficient T cell regulation that avoids the risks of nonspecific immunosuppressive drugs. In this study, we studied how cartilage proteoglycan-specific CD4(+) T cells transduced with an active IL-10 gene (T(IL-10)) may contribute to the amelioration of chronic and progressive proteoglycan-induced arthritis in BALB/c mice. TCR-transgenic proteoglycan-specific T(IL-10) cells ameliorated arthritis, whereas T(IL-10) cells with specificity for OVA had no effect, showing the impact of Ag-specific targeting of inflammation. Furthermore, proteoglycan-specific T(IL-10) cells suppressed autoreactive proinflammatory T and B cells, as T(IL-10) cells caused a reduced expression of IL-2, TNF-alpha, and IL-17 and a diminished proteoglycan-specific IgG2a Ab response. Moreover, proteoglycan-specific T(IL-10) cells promoted IL-10 expression in recipients but did not ameliorate arthritis in IL-10-deficient mice, indicating that T(IL-10) cells suppress inflammation by propagating the endogenous regulatory IL-10 response in treated recipients. This is the first demonstration that such targeted suppression of proinflammatory lymphocyte responses in chronic autoimmunity by IL-10-transduced T cells specific for a natural Ag can occur via the endogenous regulatory IL-10 response.