We identified a novel population of human T cells, studied directly ex vivo, that co-express surface B7-1 and intracellular IL-4. These peripheral blood B7-1+/CD4+ T cells expressed cell surface molecules associated with differentiation including CD45RO and MHC class II, yet were CD69(-) and CD25(-). In short-term cultures, T cell receptor (TCR) cross-linking induced further IL-4 production with little IFN-gamma or TNF-alpha. In marked contrast, CD4+ T cells negative for B7-1 expressed intracellular IFN-gamma and high amounts of TNF-alpha but little IL-4 upon TCR cross-linking. The CD4+/B7-1+/IL-4-expressing T cells were of polyclonal origin based on their diverse TCR repertoire. To explore the biological significance of this B7-1+/IL-4+ T cell population and to assess its potential regulatory role in autoimmune disease, we examined whether these T cells isolated ex vivo were altered in subjects with multiple sclerosis (MS). While the frequency of B7-1+ T cells was enhanced in patients with MS as compared to normal subjects, there was a significant diminution of B7-1+/IL-4+ T cells in the patients. The decrease in these IL-4-producing T cells in patients with autoimmune disease is consistent with a possible role as immunoregulatory T cells.