Intact CD3-specific antibody transiently depletes large numbers of T cells and subsequently induces long-term immune tolerance. The underlying mechanisms for the systemic tolerance, however, remain unclear. We show here that treatment of normal mice with intact antibody to CD3 increases systemic transforming growth factor-beta (TGF-beta) produced by phagocytes exposed to apoptotic T cells. Among the phagocytes, macrophages and immature dendritic cells (iDCs) secrete TGF-beta upon ingestion of apoptotic T cells, which induces CD4+Foxp3+ regulatory T cells in culture and contributes to immune tolerance mediated by CD3-specific antibody in vivo. In accordance with these results, depletion of macrophages and iDCs not only abrogates CD3-specific antibody-mediated prevention of myelin oligodendrocyte glycoprotein-induced acute experimental autoimmune encephalomyelitis (EAE), but also reverses the therapeutic effects of antibody to CD3 on established disease in a model of relapsing-remitting EAE. Thus, CD3-specific antibody-induced immune tolerance is associated with TGF-beta production in phagocytes involved in clearing apoptotic T cells, which suggests that apoptosis is linked to active suppression in immune tolerance.