B cells mediate multiple functions that influence immune and inflammatory responses. In this study, T cell-mediated inflammation was exaggerated in CD19-deficient (Cd19(-/-)) mice and wild-type mice depleted of CD20(+) B cells, whereas inflammation was substantially reduced in mice with hyperactive B cells as a result of CD19 overexpression (hCD19Tg). These inflammatory responses were negatively regulated by a unique CD1d(hi)CD5(+) B cell subset that was absent in Cd19(-/-) mice, represented only 1%-2% of spleen B220(+) cells in wild-type mice, but was expanded to approximately 10% of spleen B220(+) cells in hCD19Tg mice. Adoptive transfer of these CD1d(hi)CD5(+) B cells normalized inflammation in wild-type mice depleted of CD20(+) B cells and in Cd19(-/-) mice. Remarkably, IL-10 production was restricted to this CD1d(hi)CD5(+) B cell subset, with IL-10 production diminished in Cd19(-/-) mice, yet increased in hCD19Tg mice. Thereby, CD1d(hi)CD5(+) B cells represent a unique subset of potent regulatory B cells.