CD4(+) Th cells play a critical role in orchestrating the adaptive immune response. Uncontrolled Th1 responses are implicated in the pathogenesis of autoimmune diseases. T cells with immune-modulatory properties are beneficial for inhibiting such inflammatory responses. Previously we demonstrated that repetitive injections of immature DC induce expansion of DX5(+)CD4(+) T cells, which upon adoptive transfer show potent regulatory properties in murine collagen-induced arthritis as well as in delayed-hypersensitivity models. However, their regulatory mechanism remains to be defined. Here, we analyzed the effect of DX5(+)CD4(+) T cells on other CD4(+) T cells in vitro. Although proliferation of naïve CD4(+) T cells upon antigenic triggering was not altered in the presence of DX5(+)CD4(+) T cells, there was a striking difference in cytokine production. In the presence of DX5(+)CD4(+) T cells, an IL-10-producing CD4(+) T-cell response was induced instead of a predominant IFN-γ-producing Th1 response. This modulation did not require cell-cell contact. Instead, IL-4 produced by DX5(+)CD4(+) T cells was primarily involved in the inhibition of IFN-γ and promotion of IL-10 production by CD4(+) T cells. Together, our data indicate that DX5(+)CD4(+) T cells modulate the outcome of Th-responses by diverting Th1-induction into Th responses characterized by the production of IL-10.