We previously reported that a population of Fc gamma-receptor+ (Fc gamma R+) suppressor cells present in normal unstimulated rabbit bone marrow inhibited the growth of autologous rapidly proliferating bone marrow cells devoid of Fc gamma R. It is now reported that the Fc gamma R+ bone marrow cells produced a soluble, nondialyzable suppressor factor(s) (SF) which blocked the proliferation of Fc gamma R- bone marrow cells. In addition, the Fc gamma R+ cells and SF significantly inhibited spleen cell proliferation in response to concanavalin A (Con A), phytohemagglutinin, and pokeweed mitogen. The bone marrow SF exhibited a dose-dependent suppression of the growth of IL-2-dependent T lymphocytes in the presence of IL-2. SF also completely blocked the production or release of IL-2 by Con A-stimulated T cells. Thus, these bone marrow natural suppressor cells produced a soluble factor, which regulated the growth of rapidly proliferating bone marrow cells and also regulated T cell reactivity by modulating IL-2 production and activity.