Latency Associated Peptide (LAP) binds TGF-beta1, forming a latent complex. Currently, LAP is presumed to function only as a sequestering agent for active TGF-beta1. Previous work shows that LAP can induce epithelial cell migration, but effects on leukocytes have not been reported. Because of the multiplicity of immunologic processes in which TGF-beta1 plays a role, we hypothesized that LAP could function independently to modulate immune responses. In separate experiments we found that LAP promoted chemotaxis of human monocytes and blocked inflammation in vivo in a murine model of the delayed-type hypersensitivity response (DTHR). These effects did not involve TGF-beta1 activity. Further studies revealed that disruption of specific LAP-thrombospondin-1 (TSP-1) interactions prevented LAP-induced responses. The effect of LAP on DTH inhibition depended on IL-10. These data support a novel role for LAP in regulating monocyte trafficking and immune modulation.