IL-10 induces T cell anergy in numerous mouse models and specific immunotherapy of allergy in humans. Here, we demonstrate that IL-10 directly acts on T cells which are stimulated via CD28 by efficiently blocking proliferation and cytokine production. T cells tolerized by IL-10 showed high viability and the unresponsive state was reversed by anti-CD3 monoclonal antibody (mAb) stimulation and IL-2, but not by anti-CD28 mAb stimulation. Signal transduction via CD28 requires CD28 tyrosine phosphorylation and binding of phosphatidylinositol 3-kinase. IL-10 inhibited tyrosine phosphorylation of CD28; thus, the phosphatidylinositol 3-kinase binding to CD28 was blocked. Consequently, IL-10 inhibited the antigen-induced secretion of both Th1 and Th2 cytokines, including IL-2, IFN-γ, IL-4, IL-5 and IL-13. Furthermore, neutralization of endogenously produced IL-10 significantly increased T cell proliferation and both Th1 and Th2 cytokine production in vitro. Using superantigen stimuli, T cell suppression by IL-10 was merely induced at low doses when co-stimulation by CD28 was essential. Together, these data demonstrate that IL-10 directly acts on the CD28 signaling pathway and this represents an important T cell suppression mechanism leading to anergy.