The soluble HLA-G5 isoform encoded by intron-4 retaining spliced transcript has been previously detected in vivo in sera and grafts from transplanted patients who had significantly better graft acceptance. These findings led us to investigate the role of HLA-G5 in tolerance induction in vitro and its biological relevance in allograft acceptance in vivo. We demonstrated that engagement of Ig-like transcript-2 and Ig-like transcript-4 receptors by HLA-G5 is involved in inhibition of T cell alloproliferative responses. Naive T cells sensitized in vitro with HLA-G5, for as little as 18 h, 1) lost their ability to respond to subsequent allogeneic stimulus, and 2) acquired regulatory properties because they inhibited the reactivity of other T cells. These HLA-G5-induced T cells act in an Ag-nonspecific fashion and through soluble factors. Biological relevance was provided by ex vivo analyzes of samples from liver-kidney cotransplanted patients who had high HLA-G5 serum levels and no graft rejection. We showed that addition of HLA-G5-containing sera from these patients inhibited T cell alloresponses and that serum HLA-G5 was responsible for this inhibition. Notably, PBMC from transplanted patients exposed to high levels of circulating HLA-G5 did not respond to allostimulation and inhibited alloreactivity of other T cells. These results demonstrate that HLA-G5-mediated tolerance involves the induction of immunosuppressive T cells. These findings provide evidence supporting the tolerogenic properties of HLA-G and emphasize its potential application as a relevant therapeutic candidate capable of limiting allograft rejection.