CD4(+)CD25(+) T cells are potent immunoregulatory cells that suppress TCR-induced proliferation of CD4 and CD8 T cells in vitro by a cell contact-dependent mechanism. Addition of IL-2 or anti-CD28 abrogates CD4(+)CD25(+)-mediated suppression of proliferation and has been assumed to "break suppression." We examined IL-2 mRNA by quantitative PCR in cocultures of mouse CD4(+)CD25(+) and CD4(+)CD25(-) T cells. Although IL-2 gene transcription was inhibited in the presence or absence of exogenous IL-2, the addition of anti-CD28 stimulated endogenous IL-2 production. Surprisingly, transcription of IL-2 mRNA was also restored in the cocultures in the presence of anti-IL-2. These results are most compatible with a model in which CD4(+)CD25(+) T cells do not suppress the initial activation of CD4(+)CD25(-) T cells, but mediate their suppressive effects following production of IL-2 by the responder cells resulting in both the expansion of the CD4(+)CD25(+) T cells and the induction of their suppressor function.