Despite increasing evidence for the existence of antigen-specific regulatory T cells, the mechanisms underlying suppression remain unclear. In this study we have identified and cloned a novel subset of antigen-specific regulatory T cells and demonstrated that these T cells possess a unique combination of cell surface markers and array of cytokines. The regulatory T cells are able to inhibit the function of T cells carrying the same T-cell receptor specificity and prevent skin allograft rejection in an antigen-specific, dose-dependent manner. The regulatory T cells are able to acquire alloantigen from antigen-presenting cells, present the alloantigen to activated syngeneic CD8+ T cells and then send death signals to CD8+ T cells. These findings provide a novel mechanism of regulatory T-cell-mediated, antigen-specific suppression.