Although obstructive jaundice has been associated with a predisposition toward infections, the effects of bile duct ligation (BDL) on bulk intrahepatic T cells have not been clearly defined. The aim of this study was to determine the consequences of BDL on liver T cell phenotype and function. After BDL in mice, we found that bulk liver T cells were less responsive to allogeneic or syngeneic Ag-loaded dendritic cells. Spleen T cell function was not affected, and the viability of liver T cells was preserved. BDL expanded the number of CD4(+)CD25(+)Foxp3(+) regulatory T cells (Treg), which were anergic to direct CD3 stimulation and mediated T cell suppression in vitro. Adoptively transferred CD4(+)CD25(-) T cells were converted into Treg within the liver after BDL. In vivo depletion of Treg after BDL restored bulk liver T cell function but exacerbated the degrees of inflammatory cytokine production, cholestasis, and hepatic fibrosis. Thus, BDL expands liver Treg, which reduce the function of bulk intrahepatic T cells yet limit liver injury.