Dipeptidyl peptidase IV (DP IV)/CD26 and aminopeptidase N (APN)/CD13 family enzymes control T cell functions. We have previously defined these peptidases as targets to treat autoimmune disease, but the underlying mechanism is unclear. Here, we determined the effect of enzymatic inhibitors on chemotaxis by CD4+ effector T (Teff) cells. Exposure of Teff cells to the inhibitor of DP IV activity, Lys[Z(NO2)]-pyrrolidide (LZNP) and the inhibitor of APN activity, actinonin has no effect on chemotaxis or unstimulated cell migration, even at high inhibitor concentrations. LZNP and actinonin also fail to suppress migration of unfractionated lymph node cells, excluding paracrine action through other leukocyte subsets. In contrast, inhibition of DP IV and APN activities selectively suppresses lymphocyte functions including proliferation and production of the T helper type (Th)1 cytokine IFN-γ, the Th17 cytokine IL-17, as well as TNF-α, and ameliorates autoimmunity in vivo. The present results combined with previous studies suggest that LZNP and actinonin do not prevent migration of pathogenic Teff cells into target tissues, but rather suppress disease through inhibitor induced release of TGF-β by T cells at the site of inflammation.