Costimulatory blockade using cytotoxic T lymphocyte-associated antigen 4 immunoglobulin (CTLA4Ig) efficiently down-regulates immune responses in animal models and is currently used in autoimmune and transplantation clinical trials, but the precise cellular and molecular mechanisms involved remain unclear. Rats that received allogeneic heart transplants and were treated with adenoviruses coding for CTLA4Ig show long-term allograft survival. The immune mechanisms regulating induction of long-term allograft acceptance were analyzed in splenocytes using mixed leukocyte reactions (MLRs). MLRs of splenocytes but not purified T cells from CTLA4Ig-treated rats showed higher than 75% inhibition compared with controls. Splenocytes from CTLA4Ig-treated rats inhibited proliferation of naive and allogeneically primed splenocytes or T cells. MLR suppression was dependent on soluble secreted product(s). Production of soluble inhibitory product(s) was triggered by a donor antigen-specific stimulation and inhibited proliferation in an antigen-nonspecific manner. CTLA4Ig levels in the culture supernatant were undetectable and neither interleukin-10 (IL-10), transforming growth factor beta 1 (TGF beta 1), IL-4, nor IL-13 were responsible for suppression of MLRs. Inhibition of nitric oxide (NO) production or addition of IL-2 could not restore proliferation independently, but the combined treatment synergistically induced proliferation comparable with controls. Stimulation of APCs using tumor necrosis factor (TNF)-related activation-induced cytokine (TRANCE) or CD40L and addition of IL-2 normalized MLRs of CTLA4Ig-treated splenocytes. Finally, dendritic cells (DCs), but not T cells, from CTLA4Ig-treated rats inhibited naive MLRs. Altogether, these results provide evidence that after in vivo CTLA4Ig treatment, splenocytes, and in particular DCs, can inhibit alloantigen-induced proliferative responses through secretion of inhibitory products, thus promoting alloantigen-specific tolerance in vivo.