B cells are typically characterized by their ability to produce Abs, including autoantibodies. However, B cells possess additional immune functions, including the production of cytokines and the ability to function as a secondary APC. As with T cells, the B cell population contains functionally distinct subsets capable of performing both pathogenic and regulatory functions. Recent studies indicate that regulatory B cells develop in several murine models of chronic inflammation, including inflammatory bowel disease, rheumatoid arthritis, and experimental autoimmune encephalomyelitis. The regulatory function may be directly accomplished by the production of regulatory cytokines IL-10 and TGF-beta and/or by the ability of B cells to interact with pathogenic T cells to dampen harmful immune responses. In this review, we make a case for the existence of regulatory B cells and discuss the possible developmental pathways and functional mechanisms of these B cells.