Collagen-induced arthritis can be suppressed by i.v. injection of intact type II collagen (CII) but not type I collagen before immunization. To identify the mechanism mediating this suppression, splenocytes were obtained from mice injected with CII or OVA and administered to recipients that were subsequently immunized with CII. Mice receiving cells from donors injected with CII had a lower incidence of arthritis and lower antibody titers than those receiving cells from OVA-injected donors. Treatment of cells with 3000 rad of gamma-irradiation abrogated the suppression. To determine the phenotype of these donor cells, spleen cells were fractionated by adherence to plates coated with mouse anti-IgG to enrich for Thy-1+ phenotype. Thy-1+ cells injected into naive mice could significantly suppress arthritis. Further depletion of T cell subsets by panning revealed that depletion of CD4+ cells prevented the transfer of suppression whereas removal of CD8+ cells had no effect. Isolated CD4+ cells transferred into naive mice were also suppressive. Recently the Pgp-1 (Ly-24) Ag has been described to identify a unique memory subset of CD4+ cells when present on the cell surface. In CII-tolerized spleen populations, removal of the Pgp-1+ (Ly-24) subset of T cells abrogated suppression and transfer of isolated Pgp-1+ cells suppressed arthritis. These findings indicate that the Pgp-1+ subset of CD4+ cells can suppress collagen-induced arthritis and suggest that a CD4+ memory cell down-regulates autoimmunity. In addition, treatment of donor animals with cyclosporin, which inhibits the development of CD4+ cells, abrogated suppression.