After stimulation, T cells enter a transient refractory period, promoted by IL-2, during which they are resistant to re-stimulation. We previously demonstrated that these IL-2- and Ag-stimulated refractory T cells are able to suppress the Ag-induced proliferation of naive T cells in vitro. We show here that, after adoptive transfer, these T cells are also able to suppress naive T cell proliferation in vivo. More interestingly, potently suppressive T cells can be generated directly in vivo by stimulation with Ag and supplemental IL-2. The activity of the suppressive cells is dose dependent, and the suppressor and suppressed T cells need not be restricted to the same MHC or Ag. Similar to its role in promoting T cell-mediated suppression in vitro, IL-2 is critical for the induction of suppressive activity in activated T cells in vivo. Supplemental IL-2, however, cannot overcome the suppressive activity in target T cells, indicating that suppression is not mediated by competition for this cytokine. Although the activated T cells block naive T cell proliferation, the naive cells do engage Ag and up-regulate the CD25 and CD69 activation markers after stimulation. Therefore, activated T cells stimulated in the presence of IL-2 develop MHC- and Ag-unrestricted suppressive activity. These results provide a new mechanism for competition among CD4(+) T lymphocytes, in which initial waves of responding T cells may inhibit subsequently recruited naive T cells. They further suggest a novel negative feedback loop limiting the expansion of T cell responses that may be present during vigorous immune responses or after IL-2 immunotherapy.