Staphylococcal enterotoxin B (SEB) activates T cells via non-canonical signalling through the T cell receptor and is an established model for T cell unresponsiveness in vivo. In this study, we sought to characterize the suppressive qualities of SEB-exposed CD4+ T cells and correlate this with genetic signatures of anergy and suppression. SEB-exposed CD25+ and CD25-Vβ8+CD4+ T cells expressed forkhead box P3 (FoxP3) at levels comparable to naive CD25+ T regulatory cells and were enriched after exposure in vivo. Gene related to anergy in lymphocytes (GRAIL), an anergy-related E3 ubiquitin ligase, was up-regulated in the SEB-exposed CD25+ and CD25-FoxP3+Vβ8+CD4+ T cells and FoxP3-CD25-Vβ8+CD4+ T cells, suggesting that GRAIL may be important for dominant and recessive tolerance. The SEB-exposed FoxP3+GRAIL+ T cells were highly suppressive and non-proliferative independent of CD25 expression level and via a glucocorticoid-induced tumour necrosis factor R-related protein-independent mechanism, whereas naive T regulatory cells were non-suppressive and partially proliferative with SEB activation in vitro. Lastly, adoptive transfer of conventional T cells revealed that induction of FoxP3+ regulatory cells is not operational in this model system. These data provide a novel paradigm for chronic non-canonical T cell receptor engagement leading to highly suppressive FoxP3+GRAIL+CD4+ T cells.