Mature CD4-CD8- alphabeta+ T cells (DNTC) in the periphery of TCR transgenic mice are resistant to clonal deletion in cognate Ag-expressing (Ag+) mice. Previously, we have characterized DNTC populations bearing the alloreactive 2C TCR in Ag-free (Ag-) and Ag+ mice. Despite appearing functionally anergic when challenged with cognate Ag in vitro, Ag-experienced DNTC exhibit markers of activation/memory, a lowered threshold of activation, ex vivo cytolytic activity, and the ability to rapidly secrete IFN-gamma. Remarkably, these memory-like DNTC also possess potent immunoregulatory properties, competing effectively for bystander-produced IL-2 and suppressing autoreactive CD8+ T cell proliferation via a Fas/FasL-dependent cytolytic mechanism. The fact that DNTC recovered from Ag+ mice possess markers and attributes characteristic of naive CD8+ T cells that have undergone homeostasis-induced proliferation suggested that they may be derived from a similar peripheral expansion process. Naive DNTC adoptively transferred into Ag-bearing hosts rapidly acquire markers and functional attributes of DNTC that have continually developed in the presence of Ag. Thus, the peripheral selection and maintenance of such autoreactive cells may serve to negatively regulate potential autoimmune T cell responses.