To exploit a novel strategy to regulate T cell–mediated immunity, we established human and murine modified dendritic cells (DCs) with potent immunoregulatory properties (designed as regulatory DCs), which displayed moderately high expression levels of major histocompatibility complex (MHC) molecules and extremely low levels of costimulatory molecules compared with their normal counterparts. Unlike human normal DCs, which caused the activation of allogeneic CD4⁺ and CD8⁺ T cells, human regulatory DCs not only induced their anergic state but also generated CD4⁺ or CD8⁺regulatory T (Tr) cells from their respective naive subsets in vitro. Although murine normal DCs activated human xenoreactive T cells in vitro, murine regulatory DCs induced their hyporesponsiveness. Furthermore, transplantation of the primed human T cells with murine normal DCs into severe combined immunodeficient (SCID) mice enhanced the lethality caused by xenogeneic graft-versus-host disease (XGVHD), whereas transplantation of the primed human T cells with murine regulatory DCs impaired their ability to cause XGVHD. In addition, a single injection of murine regulatory DCs following xenogeneic or allogeneic transplantation protected the recipients from the lethality caused by XGVHD as well as allogeneic acute GVHD. Thus, the modulation of T cell–mediated immunity by regulatory DCs provides a novel therapeutic approach for immunopathogenic diseases.