CD4⁺CD25⁺ T cells have been shown to inhibit experimentally induced organ‐specific autoimmune disease and depletion of these regulatory T cells from normal mice results in development of such conditions. Furthermore, CD4⁺CD25⁺ T cells suppress the IL‐2 production and thereby the proliferation of polyclonally activated CD4⁺CD25^– T cells in vitro. The suppression in vitro is independent of secreted factors but requires interactions between CD4⁺CD25^– and CD4⁺CD25⁺ T cells and antigen‐presenting cells (APC). We have now further investigated the function of CD4⁺CD25⁺ T cells in vitro and have focused on their interactions with APC. We found that CD4⁺CD25⁺ T cells down‐regulated the expression of the co‐stimulatory molecules CD80 and CD86 on dendritic cells. The steady‐state level of CD80 mRNA was also decreased, while the steady‐state level of CD86 mRNA was not, suggesting that distinct mechanisms regulate the expression of these molecules. The down‐regulation occurred even in the presence of stimuli that would normally increase the expression of CD80 and CD86 molecules. Thus, down‐regulation of co‐stimulatory molecules may be an additional effector function of these regulatory T cells.