A different degree of immunodeficiency is often found at tumor sites in cancer patients. At the late stage many patients develop malignant effusion that contains large numbers of tumor cells and host immune cells that constantly interact with each other. These sites may provide an ideal model to examine in situ anti-tumor immunity. The T cells in effusion were found to be immunodeficient, which suggested a defective anti-tumor cytotoxic T lymphocytes response. To pursue the mechanism for the T cell deficiency, we determined the production of immunomodulating cytokines in the effusion and detected the presence of transforming growth factor-beta1 (TGFbeta), prostaglandin E2, IL-6, IL-10, and IFNgamma. There was no detectable IL-2, IL-4, IL-12, or TNFalpha. The most prominent feature was the presence of TGFbeta and IL-6 at a very high level. Thus, the possible role of these two cytokines on T cell competence was further determined. TGFbeta was found to induce T cell anergy and reduced the production of perforin in T killer cells and their lytic activity. These events lead to the induction of peripheral T cell tolerance with profound T cell deficiency. IL-6 did not affect perforin production or cytolytic activity of the T killer cells. But the CD4+ CD25+ regulatory T cells (TR) that were often employed by TGFbeta to suppress T cell response were reduced in the malignant effusion, consistent with the fact that IL-6 down-regulates TR and this may represent the host's vigorous response to the tumor's subversion. These results show that TGFbeta and IL-6 might play pivotal but opposing roles in the host tumor interaction that, together with other immunomodulating components, determines the outcome for the development of local tumor immunity.