Regulatory CD4+ Th cells can prevent many autoimmune diseases; however, the factors selecting for these cells remain poorly defined. In transgenic mice with a mutation in the CD4 binding region on class II MHC, the disruption of CD4-class II interactions selected for CD4+ Th cells that expressed surface markers and cytokines associated with regulatory Th cells. Th cells from these mice were enriched for CD45RB(low) as well as CD25+, while they expressed high levels of the transcription factor associated with regulatory T cells, Foxp3, and cytokines, including IL-4, IL-10, and IFN-gamma mRNA and protein. These regulatory Th cells inhibited the function of APCs via IL-10 production, and adoptive transfer of these cells prevented weight loss and inflammation in a model of colitis. CD4+ regulatory Th cells emerged only when interactions between CD4 and class II MHC were deficient on cells of nonhemopoietic origin. These data support a novel model controlling the differentiation of regulatory Th cells and suggest that interactions between CD4 and class II MHC may a useful target for re-educating T cells as a treatment for inflammatory diseases.