We previously reported that interleukin-10 (IL-10) and transforming growth factor (TGF)-β treatment of primary mixed lymphocyte reaction (MLR) cultures resulted in secondary alloantigen-specific hyporesponsiveness and protection from graft-versus-host disease (GVHD) lethality. Here, we report that CD4+ T cells recovered from the IL-10- and TGF-β-treated primary MLR cultures have immunoregulatory function. Tolerized cells significantly inhibited proliferation of naive alloreactive CD4+ T cells in a primary MLR. Inhibition of the naive alloresponse was observed with as few as 1 tolerized cell to 10 naive responder cells. Tolerized cells were able to significantly reduce GVHD lethality when injected with naive alloreactive CD4+ T cells into major histocombatibility class (MHC) II disparate recipients. Rigorous CD25 depletion of the primary MLR had no effect on generation of a regulatory capacity, suggesting that the regulatory cells likely originated from CD4+CD25- T cells. Immune suppression was mediated independently of IL-10 and TGF-β production, as neutralizing antibodies for IL-10, IL-10R, and TGF-β were unable to revert suppression, and IL-10-deficient D4+ T cells were able to mediate in vitro and in vivo suppression. The generation of immunoregulatory cells from a CD4+CD25- population during tolerization with IL-10 and TGF-β provides an additional mechanism to prevent GVHD lethality by T cells that may escape full tolerance induction.