A regulatory subset of B cells has been found to modulate immune responses in autoimmunity, infection, and cancer, but it has not been investigated in the setting of human persistent viral infection. IL-10 is elevated in patients with chronic hepatitis B virus infection (CHB), but its cellular sources and impact on antiviral T cells have not been addressed. We investigated the role of IL-10 and regulatory B cells in the pathogenesis of CHB. Serum IL-10 levels were studied longitudinally in patients with CHB undergoing spontaneous disease flares. There was a close temporal correlation between IL-10 levels and fluctuations in viral load or liver inflammation. Blockade of IL-10 in vitro rescued polyfunctional virus-specific CD8 T cell responses. To investigate the potential contribution of regulatory B cells, their frequency was measured directly ex vivo and after exposure to stimuli relevant to hepatitis B virus (HBV) (CpG or HBV Ags). IL-10-producing B cells were enriched in patients, and their frequency correlated temporally with hepatic flares, both after stimulation and directly ex vivo. Phenotypically, these cells were predominantly immature (CD19(+)CD24(hi)CD38(hi)) ex vivo; sorted CD19(+)CD24(hi)CD38(hi) cells suppressed HBV-specific CD8 T cell responses in an IL-10-dependent manner. In summary, these data reveal a novel IL-10-producing subset of B cells able to regulate T cell immunity in CHB.