IL-35 is produced by regulatory T cells, and this novel cytokine can downregulate Th17 cell development and inhibit autoimmune inflammation. In this work, an rIL-35, as a single-chain fusion between murine IL-12p35 and EBV-induced gene 3, was expressed in yeast. This rIL-35 inhibited OVA-specific cellular and Ab responses in OVA-challenged recipients of DO11.10 CD4+ T cells. Likewise, IL-35 inhibited clinical manifestation of collagen-induced arthritis or could cease further disease exacerbation upon initiation of IL-35 treatment. Exogenous IL-35 treatments suppressed Th1 and Th17 cells and promoted CD39 expression by CD4+ T cells. Sorted CD25-CD39+CD4+ T cells from IL-35-treated mice produced IL-10 and, upon adoptive transfer, were sufficiently potent to inhibit subsequent development of inflammation in mice with collagen-induced arthritis, whereas sorted CD25+CD39+CD4+ T cells showed reduced potency. IL-35 treatments of IL-10-/- mice failed to induce protective CD39+CD4+ T cells, demonstrating the effector role of IL-10 by IL-35 immunosuppression.