Evidence suggests that chronic inflammation in several human autoimmune diseases, such as rheumatoid arthritis (RA), is mediated by activated Th1 cells. Delineation of the regulatory mechanisms controlling a Th1-biased human immune reaction and its pathologic potential is, therefore, a critical step in the understanding of chronic autoimmune inflammation. We analyzed T-cell subsets from patients with RA with regard to their regulatory capacity for Th1 inflammation. Flow cytometric analysis of freshly isolated peripheral blood (PB) and synovial fluid (SF) T cells revealed that rheumatoid inflammation is characterized by the absence of Th2 cells and their cytokines. Moreover, resting T cells from patients with RA expressed an impaired ability to differentiate into Th2 effectors with a potential to downmodulate Th1 inflammation. Thus, altered Th2 cell differentiation might contribute to the imbalance in favor of inflammatory Th1 cells in RA. Whereas Th2 cytokines, such as IL-4, play essential roles in regulating the development and perpetuation of Th1-mediated autoimmune responses, a novel subset of regulatory CD4 T cells that express CD25 on their surface and perform their suppressor function on the development of autoimmune inflammation by cytokine-independent mechanisms has recently been described in animals and humans. However, their in vivo role in human inflammation is largely elusive. We identified CD4CD25pos T cells in the PB and the SF of patients with active RA. Importantly, CD4CD25pos T cells from both RA PB and RA SF exerted potent suppressive activity as proliferation of autologous peripheral blood mononuclear cells was significantly inhibited by the presence of CD4CD25pos T cells compared with proliferation in the presence of CD4CD25neg T cells. CD4CD25 regulatory T-cell-mediated inhibition of the proliferation was abrogated by addition of exogenous IL-2, a characteristic of CD4CD25 regulatory T cells in animals. Moreover, RA CD4CD25 T cells had a markedly decreased proliferative capacity in response to anti-CD3 monoclonal antibody, suggesting an anergic phenotype typical for CD4CD25 regulatory T cells. Together, the data indicate that, in contrast to immunomodulatory Th2 effectors, CD4CD25pos T cells with potent suppressive potential are present in rheumatoid inflammation. The data further suggest that CD4CD25pos regulatory T cells are involved in the continuous regulation of the developing human Th1 inflammation in vivo. However, their activity appears to be insufficient to silence the chronic immune response in RA.