Suppression by T regulatory (Tr) cells is essential for the induction of peripheral tolerance. Many types of CD4+ Tr cells have been described in a number of systems, and although the precise mechanisms which mediate their effects remain to be defined, it is well established that they can suppress immune responses via cell-cell interactions and/or the production of interleukin-10 (IL-10) and transforming growth factor-β (TGF-β). Type 1 T regulatory (Tr1) cells are defined by their ability to produce high levels of IL-10 and TGF-β, and these cytokines mediate their ability to suppress pathological immune responses in the settings of transplantation, allergy and autoimmune disease. Tr1 cell activity is not necessarily beneficial, and they can also suppress immune responses to antigens from tumours and pathogens. In vivo, the differentiation of Tr1 cells is likely controlled by certain dendritic cells which promote IL-10 production and may express tolerogenic costimulatory molecules. Another subset of CD4+ Tr cells is defined by constitutive expression of CD25, and although these CD4+ CD25+ Tr cells appear to suppress via mechanisms which are largely independent of cytokines, they may actively promote the differentiation of Tr1 cells. Many questions about the basic biology of Tr1 cells remain to be answered, but the development of therapeutic strategies designed to harness their immunoregulatory effects can already be contemplated.