We have previously demonstrated that bone marrow cells (BMC) inhibit the generation of autologous Epstein-Barr virus (EBV) -specific cytotoxic T lymphocytes (CTL). It was also observed that CD3(+) cells obtained after 7 days of culture in the presence of autologous BMC could be used as inhibitors of EBV-CTL generation. In the present study, we examined these BMC induced regulator CD3(+) T cells with respect to phenotype, function, and T-cell activation pathways. We also questioned if the CD3(+) regulatory cell function is mediated by their direct effect on peripheral T cells or on the ability of antigen presenting cells (APC) to stimulate peripheral T cells. To answer this, CD3(+) cells from peripheral blood lymphocytes (PBL) were cultured with either CD3-depleted BMC or with CD3-depleted PBL. The CD3(+) cells were then isolated with immunomagnetic beads, designated as T(BM) and T(PBL), and were compared in functional studies. There was an increase in the expression of CD25 on T(BM) cells. The T(BM) cells also expressed less CD122 and a decreased number of CD3 molecules per cell. Both T(BM) and T(PBL) cell populations responded to mitogen (PHA) to the same magnitude. However, when stimulated through the CD3 complex with anti-CD3 monoclonal antibody (mAb), the T(BM) cells had a significantly decreased response than did T(PBL). The addition of IL-2 to these latter cultures augmented, but could not fully restore, the response. Additionally, stimulation of T(BM) cells with allogeneic cells failed to produce cytotoxic T cells. These "anergized" T(BM) and "nonanergized" (control) T(PBL) cells were added as third-party cells to a CTL generating culture of autologous PBL stimulated with allogeneic cells. The T(BM) cells exhibited suppressor function and inhibited the generation of CTL, in contrast with T(PBL). The effect of T(BM) cells on direct and indirect antigen presentation pathways demonstrated that T(BM) primarily effected indirect, but not direct, alloantigen presentation. To further explore the cytoplasmic T-cell activation events that occurred after the coculture of the PBL T cells with BMC, the levels of zeta-associated protein 70 (ZAP70) and extracellular receptor-activated kinase (ERK) were determined. There was a decrease in ZAP70 levels in the T(BM), which correlated with its reduced expression of cell surface CD3 and the attenuated response to anti-CD3 mAb activation. However, the activity of ERK was equally expressed by T(BM) and T(PBL). It, therefore, appears that the culturing of peripheral T cells with (non-T) BMC anergizes these cells (which become refractory to stimulation through the T-cell receptors), and induces immune suppressor function. These in vitro observations may provide a mechanism by which infused donor BMC serve to downregulate T-cell immunity.