Prior reports have shown that CD4(+)CD25(+) regulatory T cells suppress naive T cell responses by inhibiting IL-2 production. In this report, using an Ag-specific TCR transgenic system, we show that naive T cells stimulated with cognate Ag in the presence of preactivated CD4(+)CD25(+) T cells also become refractory to the mitogenic effects of IL-2. T cells stimulated in the presence of regulatory T cells up-regulated high affinity IL-2R, but failed to produce IL-2, express cyclins or c-Myc, or exit G(0)-G(1). Exogenous IL-2 failed to break the mitotic block, demonstrating that the IL-2 production failure was not wholly responsible for the proliferation defect. This IL-2 unresponsiveness did not require the continuous presence of CD4(+)CD25(+) regulatory T cells. The majority of responder T cells reisolated after coculture with regulatory cells failed to proliferate in response to IL-2, but were not anergic and proliferated in response to Ag. The mitotic block was also dissociated from the antiapoptotic effects of IL-2, because IL-2 still promoted the survival of T cells that had been cocultured with CD4(+)CD25(+) T cells. IL-2-induced STAT5 phosphorylation in the cocultured responder cells was intact, implying that the effects of the regulatory cells were downstream of receptor activation. Our results therefore show that T cell activation in the presence of CD4(+)CD25(+) regulatory T cells can induce an alternative stimulation program characterized by up-regulation of high affinity IL-2R, but a failure to produce IL-2, and uncoupling of the mitogenic and antiapoptotic effects of IL-2.