Despite the unequivocal role of B lymphocytes as effecter cells in humoral immunity, studies have reported that B cells are tolerogenic. The impact of B cell-mediated tolerance and its underlying mechanisms are incompletely understood. Using primary B cells as APCs and allogeneic CD4 T cells as responder cells in mixed leukocyte reactions, we find that B cells preferentially expand FoxP3(+) over FoxP3(-) CD4 T cells in the absence of exogenous cytokines. The preferential expansion of Foxp3(+) T cells is further enhanced by a partial blockade of class II MHC-TCR interaction but diminished by stimulatory anti-CD28 Ab or at high B to T cell ratios. Gamma irradiation of B cells selectively abrogates their ability to expand isolated CD25(+) but not CD25(-) CD4 T cells; exogenous IL-2 supplement can partially restore this function. B cell-expanded CD25(+) T cells express high levels of FoxP3 and are highly inhibitory in an Ag-specific manner.