Columnar epithelial cells (EC) isolated from the rat small intestine can present protein antigen in vitro, inducing proliferation of primed T cells. This system was used to examine the immunoregulatory function of T cells activated by presentation of ovalbumin (OVA) by EC. Rat lymph node T cells, sensitized to OVA in vivo and exposed to EC and OVA in vitro, suppressed the in vitro proliferative response of primed T cells to OVA. The suppression mediated by these modulated T cells (Tmod) was antigen-specific, was restricted during the induction phase by Ia antigens on the EC accessory cells, and was not affected by irradiation of Tmod. The generation of suppressor activity in Tmod was accompanied by an increase in expression of suppressor phenotype. It is suggested that a possible in vivo correlate of this phenomenon may play a role in the induction of suppressor T cells mediating systemic tolerance to dietary antigens.