Lacrimal epithelial cells appear to constitutively secrete autoantigens to their underling stroma. The present experiments address the hypothesis that they also secrete soluble factors that regulate immune responses. Epithelial cells, spleen cells and lymphocytes were obtained from rabbits or rats and cultured in various configurations. Monocytes from rat bone marrow were matured to dendritic cells (DC) ex vivo. Proliferation was measured by [3H]-thymidine incorporation; surface MHC Class II and CD86 using flow cytometry; and mRNA relative abundances using real time RT-PCR. Microporous culture inserts containing rat lacrimal cells inhibited proliferation of rabbit lymphocytes co-cultured with autologous lacrimal cells and of rat lymphocytes co-cultured with TNF-alpha-stimulated DC. They inhibited CD86 and MHC Class II surface expression by maturating DC and reversed surface expression of CD86 but not MHC Class II by partially matured DC. Subsequent exposure of partially matured DC to mediators from rat lacrimal cells reversed the ability to stimulate lymphocyte proliferation. TGF-beta(1) and IL-10 mRNAs increased somewhat when rat lacrimal cells were isolated but decreased markedly in rabbit lacrimal cells. Antibodies to TGF-beta prevented soluble factors from rat lacrimal cells from inhibiting proliferation of rabbit lymphocytes co-cultured with rabbit lacrimal cells, but recombinant TGF-beta alone did not mimic the soluble factors. IL-10 immunopositivity was detected in epithelial cells of interlobular ducts and occasional interstitial cells in rabbit lacrimal gland. Rat lacrimal epithelial cells secrete TGF-beta and other factors that synergize to suppress lymphocyte proliferation and regulate DC maturation. Interlobular duct epithelial cells in rabbit lacrimal glands may express similar functions.