Although the effects of 2,3,7,8-tetrachlorodibenzo-p-dioxin (TCDD) are mediated through binding and activation of the aryl hydrocarbon receptor (AhR), the subsequent biochemical and molecular changes that confer immune suppression are not well understood. Mice exposed to TCDD during an acute B6-into-B6D2F1 graft-vs-host response do not develop disease, and recently this has been shown to correlate with the generation of CD4(+) T cells that express CD25 and demonstrate in vitro suppressive function. The purpose of this study was to further characterize these CD4(+) cells (TCDD-CD4(+) cells) by comparing and contrasting them with both natural regulatory CD4(+) T cells (T-regs) and vehicle-treated cells. Cellular anergy, suppressive functions, and cytokine production were examined. We found that TCDD-CD4(+) cells actively proliferate in response to various stimuli but suppress IL-2 production and the proliferation of effector T cells. Like natural T-regs, TCDD-CD4(+) cells do not produce IL-2 and their suppressive function is contact dependent but abrogated by costimulation through glucocorticoid-induced TNFR (GITR). TCDD-CD4(+) cells also secrete significant amounts of IL-10 in response to both polyclonal and alloantigen stimuli. Several genes were significantly up-regulated in TCDD-CD4(+) cells including TGF-beta3, Blimp-1, and granzyme B, as well as genes associated with the IL12-Rb2 signaling pathway. TCDD-CD4(+) cells demonstrated an increased responsiveness to IL-12 as indicated by the phosphorylation levels of STAT4. Only 2% of TCDD-CD4(+) cells express Foxp3, suggesting that the AhR does not rely on Foxp3 for suppressive activity. The generation of CD4(+) cells with regulatory function mediated through activation of the AhR by TCDD may represent a novel pathway for the induction of T-regs.