Previously we reported that TGF-β has an important role in the generation and expansion of human “professional” CD4+ CD25+ regulatory T cells in the periphery that have a cytokine-independent mechanism of action. In this study we used low-dose staphylococcal enterotoxin to induce T cell-dependent Ab production. We report that TGF-β induces activated CD4+ CD25− T cells to become Th3 suppressor cells. While stimulating CD4+ cells with TGF-β modestly increased expression of CD25 and intracellular CTLA-4 in primary cultures, upon secondary stimulation without TGF-β the total number and those expressing these markers dramatically increased. This expansion was due to both increased proliferation and protection of these cells from activation-induced apoptosis. Moreover, adding as few as 1% of these TGF-β-primed CD4+ T cells to fresh CD4+ cells and B cells markedly suppressed IgG production. The inhibitory effect was mediated by TGF-β and was also partially contact dependent. Increased TGF-β production was associated with a decreased production of IFN-γ and IL-10. Depletion studies revealed that the precursors of these TGF-β-producing CD4+ suppressor cells were CD25 negative. These studies provide evidence that CD4+ CD25+ regulatory cells in human blood consist of at least two subsets that have TGF-β-dependent and independent mechanisms of action. TGF-β has an essential role in the generation of both of these T suppressor cell subsets from peripheral T cells. The ability to induce CD4+ and CD8+ cells to become regulatory cells ex vivo has the potential to be useful in the treatment of autoimmune diseases and to prevent transplant rejection.