We have studied the veto cell-mediated induction of transplant tolerance by allogeneic donor bone marrow cells and have achieved kidney allograft tolerance in a preclinical rhesus monkey model. Here we extend these studies to investigate the veto mechanism of CTLp suppression and the role of CD8 and TGF-beta in these events. Infusion of DR-/dim donor BMC into RATG-treated rhesus monkeys induced functional deletion of donor-specific CTLp and prolongation of kidney allograft survival, whereas depletion of the CD8+ subset from BMC ablated these effects. A role of CD8 in the veto effect was further implicated by rhesus MLR-induced CML experiments in which pretreatment of normal responder cells with MAb to MHC class I, the natural ligand of CD8, blocked the suppressive activity of allogeneic BMC. In addition, pretreatment of the BMC with anti-CD8 MAbs blocked strong veto activity significantly, suggesting that CD8 functions as an accessory or adhesion ligand. In contrast, anti-CD8 treatment significantly enhanced weak BMC-mediated veto activity, suggesting that CD8 might additionally serve as a signal transducer to increase veto activity, perhaps by the induction of cytokine release. The cytokine TGF-beta was studied because it has immunosuppressive properties that are shared by veto cells. Human TGF-beta, like BMC veto cells, inhibited MLR-induced CML in a dose-dependent manner, and anti-TFB-beta Ig relieved the BMC-mediated veto suppressive effect. Active TGF-beta was detected only in the supernatants of CML cultures containing BMC. Pretreatment of BMC with L-leucyl-leucine methyl ester (Leu-leu-OMe), which eliminates cytotoxic precursor and effector lymphocytes and monocytes, did not affect levels of active TGF-beta. In previous studies, the veto effect of BMC was also shown to be Leu-leu-OMe-resistant. Finally, treatment of isolated DR-/dim BMC cultures with anti-CD8 elicited TGF-beta secretion, whereas anti-CD2 or anti-CD3 had no effect. When isolated after stimulation with anti-CD8, only the CD8+ subset of DR-/dim BMC produced detectable levels of active TGF-beta. In summary, these studies demonstrate that CD8 functions as an immunoregulatory molecule in veto effects by freshly isolated rhesus BMC and suggest that CD8-ligand interactions may induce low-level secretion of TGF-beta to mediate or facilitate the veto mechanism of CTLp inactivation in a paracrine manner.