We evaluated whether the regulatory function of CD4(+)CD25(high+)FoxP3(+) T-cells from patients on tacrolimus and mycophenolate mofetil (MMF) is affected by preceding steroid and anti-CD25 mAb induction therapy and whether this function is associated with rejection after kidney transplantation. Kidney recipients (N=15) were randomized to receive either anti-CD25 mAb induction (i.e., daclizumab) or steroids for 4 months. We analyzed the presence and suppressive activity of CD4(+)CD25(high+)FoxP3(+) peripheral T-cells in samples obtained at pre and 4-6 months after transplantation. Anti-CD25 mAb therapy and treatment with steroids did not significantly affect protein expression of FoxP3. However, at the functional level, significant differences were found in the regulatory activities of CD4(+)CD25(high+) T-cells from the anti-CD25 group vs those from the steroid group. At 4-6 months after transplantation, the regulatory activities of CD4(+)CD25(high+) T-cells were comparable to those before anti-CD25 mAb therapy; 49+/-13% (mean+/-SEM) vs 40+/-14% at a 1:20 ratio (CD25(high+):CD25(-/dim)), respectively. In contrast, the regulatory capacities of CD(+)D25(bright+) T-cells from the steroid patient group became significantly impaired. The percentage inhibition of the anti-donor response decreased from 57+/-12% before transplantation to 12+/-7% after transplantation (p<0.01). Five out of 15 patients experienced a rejection episode. At 4-6 months after transplantation, the CD25(high+) cells from these rejectors (who all received daclizumab induction therapy) had clear regulatory function, while suppression by CD25(high+) cells from non-rejectors (N=10) was significantly lower. The percentage inhibition of the anti-donor response was 48+/-14% (mean+/-SEM) vs 10+/-7%, respectively, p=0.02. Anti-CD25 mAb induction therapy does not negatively influence the regulatory function of CD4(+)CD25(high+)FoxP3(+) T-cells from kidney transplant recipients on tacrolimus and MMF. The majority of these patients experienced an acute rejection episode, which suggests that immune activation is required for persistent immunoregulatory function.