Oral antigen application induces tolerance, leading to suppression of a subsequent systemic challenge with this antigen. The suppression is mediated by mucosal regulatory T (Tr) cells that maydifferentiate from naive peripheral T cells in the gut‐draining lymphoid tissue. However, little is known about the initial steps of this differentiation process. In this study we show that 48 h after oral OVA treatment, antigen‐specific T cells in mesenteric lymph nodes (MLN) and Peyer's Patches (PP) were activated and had divided up to four times. The first division was already seen in PP after 24 h. Analysis of surface marker expression and cytokine secretion of the dividing antigen‐specific T cells revealed that they sequentially obtained an activation‐ and memory‐like phenotype. These cells secreted IL‐2 in most stages of division but only transiently IFN‐γ whereas no IL‐4 or IL‐10 secretion was detected. Remarkably, 48 h after antigen application, isolated dividing cellswere suppressive, as they transferred tolerance to naive mice. Even though CD25 was expressed heterogeneously, both CD25⁺ and CD25^– OVA‐specific T cells from MLN could transfer tolerance. Together these findings show that differentiation of functional Tr cells occurs in the MLN and PP within 2 days after antigen ingestion and involves the generation of CD25⁺ and CD25^– antigen‐specific T cells.