We tested the hypothesis that immature APC, whose NF-κB-signaling pathway and thus maturation was blocked by the proteosome inhibitor benzyloxycarbonyl-isoleucyl-glutamyl(O-tert-butyl)-alanyl-leucinal (PSI), could be a source of Ag-specific regulatory T (Treg) cells. DO11.10 CD4+ T cells that were incubated with Ag- and PSI-pulsed APC proliferated poorly, produced less IL-2, IFN-γ, and IL-10 in secondary cultures, and inhibited the response of both naive and memory CD4+ T cells stimulated by Ag-pulsed APC. The generation of PSI-APC Treg cells required IL-10 production by APC. PSI-APC Treg cell inhibition required cell-cell contact but not IL-10 or TGF-β. Addition of IL-2 did not reverse, but Ab to CTLA-4 did reverse partially the inhibitory effect. Depletion of CD25+ T cells before initial culture with PSI-APC did not affect Treg generation. PSI-APC Treg cells expressed high levels of Foxp3, inhibited proliferation of naive DO11.10 T cells in vivo, and abrogated colitis driven by a memory Th1 response to bacterial-associated Ag. We conclude that NF-κB-blocked, immature APC are able to induce the differentiation of Treg cells that can function in vitro and in vivo in an Ag-specific manner.