The induction of tolerance is essential for the maintenance of immune homeostasis, for the prevention of autoimmune diseases, and to achieve transplantation tolerance. To induce tolerance, the immune system uses several mechanisms, including the deletion of autoreactive T cells, the induction of anergy, and active suppression of autoimmune responses. The mechanisms of thymic deletion and anergy of autoreactive T cells are well characterized, whereas active suppression by T-regulatory (Tr) cells, which has recently emerged as an essential component of the immune response to induce peripheral tolerance, is less well understood. Results from seminal studies by a number of laboratories have renewed interest in CD4+ T cells with regulatory properties. Although many aspects of the mechanisms by which these cells exert their effects have still to be elucidated, it is well established that T-regulatory cells suppress immune responses by means of cell-to-cell interactions or the production of interleukin (IL)-10, transforming growth factor (TGF)-β, or both. Type-1 Tr (Tr1) cells are defined by their ability to produce high levels of IL-10 and TGF-β. Tr1 cells specific for a variety of antigens arise in vivo but may also differentiate from naive CD4+ T cells in the presence of IL-10 in vitro. Tr1 cells have a low proliferative capacity. Tr1 cells suppress naive and memory T-helper type 1 or 2 responses by means of production of IL-10 and TGF-β. Further characterization of Tr1 cells at the molecular level will define their mechanisms of action and clarify their relationship with other subsets of Tr cells. The use of Tr1 cells to identify novel targets for the development of new therapeutic agents, and as a cellular therapy to modulate peripheral tolerance, can be foreseen.