Recently, we have found that the neuropeptide alpha-melanocyte stimulating hormone (alpha-MSH) not only suppresses IFN-gamma production, but also induces TGF-beta1 production by activated effector T cells. These alpha-MSH- treated effector T cells function as regulatory T cells in that they suppress IFN-gamma production and hypersensitivity mediated by other effector T cells. Experimental autoimmune uveoretinitis (EAU) was suppressed in its severity and incidence in mice that were injected with primed T cells activated in vitro by APC and antigen in the presence of alpha-MSH. Moreover, it appeared that alpha-MSH had converted a population of effector T cells polarized to mediate hypersensitivity into a population of T cells that now mediated immunoregulation. To characterize these alpha-MSH- treated T cells, primed T cells were TCR-stimulated in the presence of alpha-MSH in vitro and their lymphokine profile was examined. Such effector T cells displayed enhanced levels of TGF-beta1 production and no IFN-gamma or IL-10, with IL-4 levels remaining unchanged in comparison with inactivated T cells. In addition, if soluble TGF-beta receptor II was added to cocultures of alpha-MSH-treated T cells and activated Th1 cells, the alpha-MSH-treated T cells could not suppress IFN-gamma production by the Th1 cells. These results suggest that alpha-MSH induces T cells with a regulatory lymphokine pattern, and that through their production of TGF-beta1 these cells suppress other effector T cells. Examination of the alpha-MSH-treated T cells showed that alpha-MSH did not alter the phosphorylation of CD3 molecules following TCR engagement. Primed T cells express the melanocortin 5 receptor (MC5r), a receptor that is linked to an intracellular signalling pathway shared by other cytokine receptors. Blocking the receptor with antibody prevented alpha-MSH from suppressing IFN-gamma production by the activated regulatory T cells, suggesting that alpha-MSH immunoregulation is through the MC5r on primed T cells. Surface staining and cell sorting of the alpha-MSH- treated primed T cells showed that the regulatory T cells are CD25+ CD4+ T cells. From these results we find that alpha-MSH can mediate the induction of CD25+ CD4+ regulatory T cells. These regulatory T cells require specific antigen for activation, but through non-specific TGF-beta1-mediated mechanisms they can suppress other effector T cells.