TGF-beta1 is present on cells derived from the microenvironment of human lung tumors and nonmalignant inflammatory tissues. We establish that this cell-associated cytokine mediates hyporesponsiveness of the memory T cells in these microenvironments in situ by blocking TCR signaling. T cells derived from these tissues failed to translocate NF-kappaB to the nucleus in response to CD3 + CD28 cross-linking. This nonresponsiveness was reversed by an anti-TGF-beta1-neutralizing Ab. Refractoriness of the memory T cells to TCR activation was also reversed by the removal of TGF-beta1 by briefly pulsing the cells in a low pH buffer. Addition of exogenous TGF-beta1 to eluted T cells re-established their nonresponsive state. Neither TGF-beta1, anti-TGF-beta1 Ab, nor low pH affected TCR signaling potential of peripheral blood T cells. We conclude that TGF-beta1 mediates a physiologically relevant regulatory mechanism, selective for memory T cells present in the tumor microenvironment and nonmalignant chronic inflammatory tissues.