In IL-2-deficient mice, antigen-activated CD4 T cells accumulate and cause lethal immune pathology. Wild-type cells of hematopoietic origin present in the same animal are able to prevent this hyperactivation of T cells, but the mechanisms and cells controlling the IL-2-deficient cells are unknown. Here we show that IL-2(-) CD4 cells with an ovalbumin-specific transgenic TCR (IL-2(-) OVAtg) undergo both clonal expansion and clonal contraction when transferred to euthymic recipients and challenged with antigen, but continuously expand in athymic hosts. Cotransfer of wild-type CD4 T cells prevents the accumulation of IL-2-deficient cells. On the residual IL-2(-) TCRtg cells CD69 and CD25 are up-regulated, suggesting that activation per se is not suppressed and that the cells had received an IL-2 signal. Since IL-2 is able to restore the defective antigen-induced cell death (AICD) of IL-2-deficient T cells in vitro, paracrine IL-2 provided by the wild-type CD4 cells may thus be able to allow clonal contraction of IL-2-deficient cells also in vivo. Interestingly however, regulatory CD4(+)CD25(+) cells also efficiently contain the clone size of antigen-stimulated IL-2-deficient T cells. Since CD4(+)CD25(+) cells do not produce IL-2, this suggests a mechanism of suppression distinct from paracrine IL-2 delivery. In keeping with this, the residual IL-2(-) TCRtg cells recovered after cotransfer of regulatory CD4(+)CD25(+) cells do not show increased CD25 or CD69 expression, suggesting that they had not received paracrine IL-2 and that clonal containment occurred at the level of initial activation rather than clonal contraction by AICD. IL-2 deficiency therefore may upset T cell homeostasis by two distinct mechanisms: the failure to program expanding T cells for apoptosis, and the failure to generate functional CD4(+)CD25(+) regulatory cells.