The CD4 ؉ CD25 ؉ regulatory T lymphocytes have been implicated in suppressing T cell immune responses. Our aim was to characterize the frequency, phenotype, function, and specificity of CD4 ؉ CD25 ؉ T cells in hepatitis C virus (HCV) infection. Peripheral CD4 ؉ CD25 ؉ cells from recovered (n ؍ 15), chronic infected (n ؍ 30), and normal control (n ؍ 15) subjects were analyzed ex vivo for quantitation, phenotype, and effect on HCVspecific interferon gamma production and proliferation. CD4 ؉ CD25 ؉ specificity was determined by intracellular cytokine staining for interleukin 10 (IL-10). A higher proportion of CD4 ؉ CD25 ؉ were found in chronic infection (mean, 3.02%) when compared with recovered (1.64%, P ؍ .001) and normal controls (2.27%, P ؍ .02). CD4 ؉ CD25 ؉ cells display CD45RO high , CD45RA low , CD28 high , CD62L high , and CD95 high phenotype. HCVspecific interferon gamma activity was enhanced in peripheral blood mononuclear cells depleted of CD4 ؉ CD25 ؉ and suppressed in peripheral blood mononuclear cells enriched with CD4 ؉ CD25 ؉ . Depletion of CD4 ؉ CD25 ؉ cells also enhanced HCV-specific CD4 ؉ and CD8 ؉ T cell proliferation. Cytokine analysis suggested CD4 ؉ CD25 ؉ cells secrete transforming growth factor beta (TGF- 1 ) and IL-10. The inhibitory role for TGF- 1 was confirmed by anti-TGF- 1 . Transwell studies showed CD4 ؉ CD25 ؉ mediated suppression to be dose dependent and requiring cell contact. CD4 ؉ CD25 ؉ cells showed HCV-specificity through IL-10 production, with a frequency ranging from 1.9% to 5.3%. A positive correlation was detected between CD4 ؉ CD25 ؉ T cell frequency and HCV RNA titer, whereas an inverse relation was found with liver inflammatory activity. In conclusion, CD4 ؉ CD25 ؉ T lymphocytes constitute a highly differentiated population and appear to play a role in viral persistence by suppressing HCV-specific T cell responses in a cell-cell contact manner.