Under normal circumstances, the respiratory tract maintains immune tolerance in the face of constant antigen provocation. Using a murine model of tolerance induced by repeated exposure to a low dose of aerosolized antigen, we show an important contribution by CD4(+) T cells in the establishment and maintenance of tolerance. The CD4(+) T cells expressed both cell surface and soluble TGF-beta and inhibited the development of an allergic phenotype when adoptively transferred to naive recipient mice. While cells expressing cell surface TGF-beta were detectable in mice with inflammation, albeit at a lower frequency compared with that in tolerized mice, only those from tolerized mice expressed FOXP3. Blockade of TGF-beta in vitro and in vivo interfered with immunosuppression. Although cells that expressed TGF-beta on the cell surface (TGF-beta(+)), as well as the ones that did not (TGF-beta(-)), secreted equivalent levels of soluble TGF-beta, only the former were able to blunt the development of an allergic phenotype in mice. Strikingly, separation of the TGF-beta(+) cells from the rest of the cells allowed the TGF-beta(-) cells to proliferate in response to antigen. We propose a model of antigen-induced tolerance that involves cell-cell contact with regulatory CD4(+) T cells that coexpress membrane-bound TGF-beta and FOXP3.