Suppression by T regulatory (T(reg)) cells is essential for the induction of peripheral tolerance. Several types of CD4+ T(reg) cells have been described in a number of systems. Although the precise mechanisms which mediate T(reg) cells effector activity remain to be defined, it is well established that they can suppress Immune responses via cell-cell interactions and/or the production of interleukin (IL)10 and transforming growth factor (TGF)beta. Type 1 T regulatory (T(reg)) cells are defined by their ability to produce high levels of IL10 and TGFbeta, and these cytokines mediate their ability to suppress pathological immune responses in the settings of transplantation, allergy, and autoimmune diseases. T(reg) cell activity is not necessarily beneficial, and they can also suppress immune responses to antigens from tumours and pathogens. The differentiation of T(reg) cells in vivo is likely controlled by certain dendritic cells that promote IL10 production and may express tolerogenic co-stimulatory molecules. Another subset of CD4+ T(reg) cells is defined by constitutive expression of CD25. Naturally occurring human CD4+CD25+ T(reg) cells are distinct from T(reg1) cells. Suppressive CD4+CD25+ T cell clones do not synthesize IL10 but produce TGFbeta which contributes to the suppression of proliferation mediated by these cells. However, CD4+CD25+ T(reg) cells may be involved in the process inducing the differentiation of T(reg1) cells. In conclusions, many questions on the basic biology of T(reg) cells remain to be answered, but the development of therapeutic strategies designed to harness their immunoregulatory effects can already be envisaged.