T cell anergy is characterized by the inability of the T cell to produce IL-2 and proliferate. It is reversible by the addition of exogenous IL-2. A similar state of unresponsiveness is observed when the proliferative response of murine CD4(+)CD25(-) T cells is suppressed in vitro by coactivated CD4(+)CD25(+) T cells. We have developed a suppression system that uses beads coated with anti-CD3 and anti-CD28 Abs as surrogate APCs to study the interaction of CD4(+)CD25(+) and CD4(+)CD25(-) T cells in vitro. CD4(+)CD25(+) T cell-induced suppression, in this model, was not abrogated by blocking the B7-CTLA-4 pathway. When the CD4(+)CD25(-) T cells were separated from the CD4(+)CD25(+) suppressor cells after 24 h of coactivation by the Ab-coated beads, the CD4(+)CD25(-) T cells were unable to proliferate or to produce IL-2 upon restimulation. The induction of this anergic phenotype in the CD4(+)CD25(-) T cells correlated with the up-regulated expression of the gene related to anergy in lymphocytes (GRAIL), a novel anergy-related gene that acts as a negative regulator of IL-2 transcription. This system constitutes a novel mechanism of anergy induction in the presence of costimulation.