IL-10 is a master regulator of immune responses, but its cellular source and function in cattle during the initial phase of immune priming have not been well established. Despite a massive B cell response in the abomasal draining lymph nodes in Ostertagia ostertagi (OO)-infected cattle, protective immunity is slow to develop, and partial protection requires years of repeated exposure. In addressing this problem, our initial hypothesis was that B cells produce IL-10 that downregulates the host protective immune response. However, our results showed that neutrophils made up the majority of IL-10-producing cells in circulation and in secondary lymphoid tissues, particularly the spleen (80%). Conversely, IL-10-producing B cells were rare. In addition, approximately 10% to 20% of the neutrophils in the blood and spleen expressed MHC II and were IL-10 negative, suggesting that neutrophils could also participate in antigen presentation. In vitro investigation of bovine neutrophils revealed that exposure thereof to OO extract increased IL-10 and MHC II expression in these cells in a dose-dependent manner, consistent with IL-10+/MHC II+ neutrophils detected in cattle shortly after experimental OO infection. Co-culture of untreated neutrophils with anti-CD3 antibody (Ab)-stimulated CD4+ T cells led to enhanced T cell activation; also, IL-10 depletion with neutralizing Ab enhanced the stimulatory function of neutrophils. OO extract depressed neutrophil stimulation of CD4+ T cells in the presence of IL-10-neutralizing Ab, suggesting that OO utilizes both IL-10-dependent and independent mechanisms to manipulate the bovine immune response. Finally, contact and viability were required for T cell-stimulatory neutrophil function. This report, to the best of our knowledge, is the first to demonstrate that neutrophil-derived IL-10 is directly involved in T cell regulation in cattle. Our data suggest that neutrophils and neutrophil-derived IL-10 are co-opted by nematode parasites and other pathogens to attenuate host immune responses and facilitate pathogen survival.