FTY720 (2-amino-2-(2-[4-octylphenyl] ethyl)-1, 3-propanediol hydrochloride) prolongs survival of solid organ allografts in animal models. Mechanisms of FTY720 immunomodulation were studied in mice infected with lymphocytic choriomeningitis virus (LCMV) to assess T cell responses or with vesicular stomatitis virus to evaluate Ab responses. Oral FTY720 (0.3 mg/kg/day) did not affect LCMV replication and specific CTL and B cells were induced and expanded normally. Moreover, the anti-viral humoral immune responses were normal. However, FTY720 treatment showed first a shift of overall distribution of CTL from the spleen to peripheral lymph nodes and lymphocytopenia was observed. This effect was reversible within 7–21 days. Together with unimpaired T and B cell memory after FTY720 treatment, this finding rendered enhancement of lymphocyte apoptosis by FTY720 in vivo unlikely. Secondly, the delayed-type hypersensitivity reaction to a viral MHC class I-presented peptide was markedly reduced by FTY720. These results were supported by impaired circulation of LCMV specific TCR transgenic effector lymphocytes in the peripheral blood and reduced numbers of tissue infiltrating CTL in response to delayed-type hypersensitivity reaction. Thirdly, in a CD8+ T cell-mediated diabetes model in a transgenic mouse expressing the LCMV glycoprotein in the islets of the pancreas, FTY720 delayed or prevented disease by reducing islet-infiltrating CTL. Thus, FTY720 effectively reduced recirculation of CD8+ effector T cells and their recruitment to peripheral lesions without affecting the induction and expansion of immune responses in secondary lymphoid organs. These properties may offer the potential to treat ongoing organ-specific T cell-mediated immunopathologic disease.