CD4(+)CD25(+) regulatory T cells (Treg cells) are important in maintenance of peripheral tolerance. The direct effect of CD4(+)CD25(+) Treg cells on macrophages was studied using a mouse model in which syngeneic CD4(+)CD25(+) Treg cells were adoptively transferred into the peritoneal cavity of SCID mice. Peritoneal macrophages in mice transferred with CD4(+)CD25(+) Treg cells expressed significantly higher levels of CD23, CD47 and CD206 and less CD80 and major histocompatibility complex class II molecules as compared with those mice that received either CD4(+)CD25(-) T cells or no cells. Macrophages of mice injected with CD4(+)CD25(+) Treg cells displayed a remarkably enhanced phagocytosis of chicken red blood cells, and arginase activity together with an increased interleukin-10 (IL-10) production, whereas they showed a decreased antigen-presenting ability and nitric oxide production. Furthermore, CD4(+)CD25(+) Treg cells and CD4(+)CD25(-) T cells showed strong antagonistic effects on macrophage polarizations in vivo. Blocking arginase, IL-10 and/or transforming growth factor-β (TGF-β) partially but significantly reversed the effects of CD4(+)CD25(+) Treg cells to induce M2 macrophages in vivo suggesting that CD4(+)CD25(+) Treg cells have the ability to induce M2 macrophages at least in part through arginase, IL-10 and TGF-β pathways. Thus, we have provided the in vivo evidence to support the unknown pathways for CD4(+)CD25(+) Treg cells to regulate innate immunity by promoting the differentiation of M2 macrophages as well as by inhibiting M1 macrophage induction by CD4(+)CD25(-) T cells in mice. CD4(+)CD25(+) Treg cells efficiently induced M2 macrophage differentiation in mice, offering the in vivo evidence to support the role of CD4(+)CD25(+) Treg cells in regulating innate immunity.