CD4⁺CD25⁺ T regulatory (T_reg) cells have been shown to critically regulate self and allograft tolerance in mice. Studies of human T_reg cells have been hindered by low numbers present in peripheral blood and difficult purification. We found that cord blood was a superior source for T_reg-cell isolation and cell line generation compared with adult blood. Cord blood CD4⁺CD25⁺ cells were readily purified and generated cell lines that consistently exhibited potent suppressor activity, with more than 95% suppression of allogeneic mixed lymphocyte reactions (MLRs) (29 of 30 donors). Cultured T_reg cells blocked cytokine accumulation in MLRs, with a less robust inhibition of chemokine production. These cell lines uniformly expressed CD25, CD62L, CCR7, CD27, and intracellular cytotoxic T-lymphocyte antigen-4 (CTLA4). FoxP3 protein, but not mRNA, was specifically expressed. Upon restimulation with anti-CD3/CD28 beads, the cultured T_reg cells produced minimal cytokines (interleukin-2 [IL-2], interferon-γ [IFN-γ], and IL-10) and preferentially expressed tumor growth factor-β (TGF-β) latency associated protein. Cytokine production, however, was restored to normal levels by restimulation with phorbol myristate acetate (PMA)/ionomycin. Cord blood–derived cultured suppressor cell function was predominantly independent of IL-10 and TGF-β. These results demonstrate cord blood contains a significant number of T_reg precursor cells capable of potent suppressor function after culture activation. Banked cord blood specimens may serve as a readily available source of T_reg cells for immunotherapy.