Induction of transplantation tolerance with certain therapeutic nondepleting monoclonal antibodies can lead to a robust state of peripheral "dominant" tolerance. Regulatory CD4+ T cells, which mediate this form of "dominant" tolerance, can be isolated from spleens of tolerant animals. To determine whether there were any extra-lymphoid sites that might harbor regulatory T cells we sought their presence in tolerated skin allografts and in normal skin. When tolerated skin grafts are retransplanted onto T cell-depleted hosts, graft-infiltrating T cells exit the graft and recolonize the new host. These colonizing T cells can be shown to contain members with regulatory function, as they can prevent nontolerant lymphocytes from rejecting fresh skin allografts, without hindrance of rejection of third party skin. Our results suggest that T cell suppression of graft rejection is an active process that operates beyond secondary lymphoid tissue, and involves the persistent presence of regulatory T cells at the site of the tolerated transplant.