Mucosal antigen delivery can induce tolerance, as shown by suppression of subsequent responses to antigen. Our previous work showed that both intranasal and oral routes of antigen delivery were effective but indicated that the intranasal route might be more reliable. Intranasal peptide administration induced cells that could mediate bystander suppression of responses to associated antigenic epitopes. Here, we discuss further investigation into the nature of intranasal, peptide-induced tolerance. Cells from mice treated with intranasal peptide became anergic and shut down secretion of cytokines such as IL-2, but still secreted IL-10. This latter cytokine was required for suppression of immune responses in vivo even though suppression of responses in vitro was IL-10 independent. Intranasal peptide induced a subset of CD25(-), CTLA-4(+) regulatory cells that suppressed naive cell function in vitro and in vivo. We provide evidence that these cells arise from CD25(-) precursors and differentiate independently from natural CD25(+) regulatory cells. IL-10-secreting regulatory cells are also found in the peripheral blood of humans and can be induced by soluble peptide administration. This route of tolerance induction offers promise as a means of antigen-specific immunotherapy of allergic and autoimmune conditions in humans.