Microglia, a population of central nervous system (CNS) macrophages, have been demonstrated to support immune accessory and effector functions in the CNS. Numerous studies support the role of microglia in CNS development and pathology, where activation of microglia is consistently noted. The current study investigated microglial immune functions under basal and activation conditions and assessed the ability of interleukin-10 (IL-10), added exogenously or produced by microglia, to down-regulate microglial functions. This report demonstrates that microglia from the adult human brain produce IL-10 following interferon-gamma/lipopolysaccharide activation. Functionally, recombinant human IL-10 down-regulated basal HLA-DR expression by microglia and inhibited, in a dose-dependent response, the ability of microglia to stimulate CD4+ T-cells in antigen presentation assays. These data, together with recent observations of the inhibition of experimental allergic encephalomyelitis (EAE) following IL-10 administration and reduced CNS infection by Listeria monocytogenes after anti-IL-10 treatment, suggest that IL-10 production by microglia may have important immune-regulatory functions in CNS disease and disease models.