Vβ5(+) regulatory T cells (Tregs), which are specific for a mouse endogenous retroviral superantigen, become activated and proliferate in response to Friend virus (FV) infection. We previously reported that FV-induced expansion of this Treg subset was dependent on CD8(+) T cells and TNF-α, but independent of IL-2. We now show that the inflammatory milieu associated with FV infection is not necessary for induction of Vβ5(+) Treg expansion. Rather, it is the presence of activated CD8(+) T cells that is critical for their expansion. The data indicate that the mechanism involves signaling between the membrane-bound form of TNF-α on activated CD8(+) T cells and TNFR2 on Tregs. CD8(+) T cells expressing membrane-bound TNF-α but no soluble TNF-α remained competent to induce strong Vβ5(+) Treg expansion in vivo. In addition, Vβ5(+) Tregs expressing only TNFR2 but no TNFR1 were still responsive to expansion. Finally, treatment of naive mice with soluble TNF-α did not induce Vβ5(+) Treg expansion, but treatment with a TNFR2-specific agonist did. These results reveal a new mechanism of intercellular communication between activated CD8(+) T cell effectors and Tregs that results in the activation and expansion of a Treg subset that subsequently suppresses CD8(+) T cell functions.