The objective of this study was to investigate the effect of airway gene transfer of interleukin (IL)-10, a cytokine with potent anti-inflammatory and immunoregulatory activities, on allergic mucosal sensitization. We used a recently described murine model that involves repeated exposures to aerosolized ovalbumin (OVA), daily for 10 d, in the context of granulocyte macrophage colony-stimulating factor (GM-CSF) expression in the airway environment achieved by intranasal delivery of a replication-deficient adenovirus carrying the GM-CSF transgene. The resulting inflammatory response was characterized by a T-helper 2 cytokine profile and marked airway eosinophilia. After complete resolution of the inflammatory response (Day 28), a single exposure to OVA reconstituted airway eosinophilia and induced airway hyperresponsiveness. We show that concurrent expression of IL-10 inhibited GM-CSF-driven OVA-specific inflammation in a dose-dependent manner. Specifically, IL-10 decreased the number of mononuclear cells, neutrophils, and eosinophils in the bronchoalveolar lavage fluid (BALF). Histologic evaluation of the tissue corroborated the findings in the BALF. Concurrent expression of IL-10 at the time of mucosal sensitization abrogated both the cellular and physiologic recall responses in vivo. Studies in interferon (IFN)-γ knockout mice demonstrated that prevention of airway eosinophilia by IL-10 was IFN-γ–independent and that expression of IL-10 was associated with decreased levels of IL-4, IL-5, and tumor necrosis factor-α in the BALF. Flow cytometric analysis of dispersed lung cells showed that expression of IL-10 in the airway reduced the absolute number of Class II major histocompatibility complex (MHC)⁺/CD11c⁺ (dendritic cells) and Class II MHC⁺/Mac-1^bright (macrophages) cells expressing the costimulatory molecules B7.1 and B7.2 by 30%. However, IL-10 coexpression did not prevent expansion of CD4 and CD8 T cells or expression of the early activation marker CD69 on T cells. Thus, airway gene transfer of IL-10 altered the immune response to OVA in a way that resulted in inhibition of airway inflammation. These findings suggest that development of an immunoregulatory strategy based on IL-10, alone or in combination with GM-CSF, warrants further consideration.