Phenotypic markers, localization, functional activities, and mechanisms of action in vitro of CD4⁺CD25⁺ T cells, purified from postnatal human thymuses, were investigated. These cells showed poor or no proliferation in mixed lymphocyte culture (MLC), and suppressed in a dose-dependent fashion the proliferative response to allogeneic stimulation of CD4⁺CD25⁻ thymocytes. Virtually all CD4⁺CD25⁺ thymocytes constitutively expressed cytoplasmic T lymphocyte antigen (CTLA)-4, surface tumor necrosis factor type 2 receptor (TNFR2), and CCR8. They prevalently localized to perivascular areas of fibrous septa and responded to the chemoattractant activity of CCL1/I-309, which was found to be produced by either thymic medullary macrophages or fibrous septa epithelial cells. After polyclonal activation, CD4⁺CD25⁺ thymocytes did not produce the cytokines interleukin (IL)-2, IL-4, IL-5, IL-13, interferon γ, and only a very few produced IL-10, but all they expressed on their surface CTLA-4 and the majority of them also transforming growth factor (TGF)-β1. The suppressive activity of these cells was contact dependent and associated with the lack of IL-2 receptor (IL-2R) α-chain (CD25) expression in target cells. Such a suppressive activity was partially inhibited by either anti–CTLA-4 or anti–TGF-β1, and was completely blocked by a mixture of these monoclonal antibodies, which were also able to restore in target T cells the expression of IL-2R α-chain and, therefore, their responsiveness to IL-2. These data demonstrate that CD4⁺CD25⁺ human thymocytes represent a population of regulatory cells that migrate in response to the chemokine CCL1/I-309 and exert their suppressive function via the inhibition of IL-2R α-chain in target T cells, induced by the combined activity of CTLA-4 and membrane TGF-β1.