Naturally occurring CD4+ CD25+ regulatory T cells (Treg) are potent suppressors of CD4+ and CD8+ T cell responses in vitro and inhibit several organ-specific autoimmune diseases. While most in vitro studies suggest that CD4+ CD25+ Treg cells adopt a cytokine-independent but cell contact-dependent mode of T cell regulation, their precise mechanism of suppression in vivo remains largely unknown. Here we examine the functional contribution of Treg cell-derived TGF-beta1 and effector T cell responsiveness to TGF-beta in CD4+ CD25+ T cell-mediated suppression of inflammatory bowel disease (IBD). We show that CD4+ CD25+ Treg cells from either TGF-beta1+/+ or neonatal TGF-beta1-/- mice can suppress the incidence and severity of IBD as well as colonic IFN-gamma mRNA expression induced by WT CD4+ CD25- effector T cells. Furthermore, TGF-beta-resistant Smad3-/- CD4+ CD25+ Treg cells are equivalent to WT Treg cells in their capacity to suppress disease induced by either WT or Smad3-/- CD4+ CD25- effector T cells. Finally, anti-TGF-beta treatment exacerbates the colitogenic potential of CD4+ CD25- effector T cells in the absence of CD4+ CD25+ Treg cells. Together, these data demonstrate that in certain situations CD4+ CD25+ T cells are able to suppress intestinal inflammation by a mechanism not requiring Treg cell-derived TGF-beta1 or effector T cell/Treg cell responsiveness to TGF-beta via Smad3.