A new type of CD4⁺T cell clone (NY4.2) isolated from pancreatic islet-infiltrated lymphocytes of acutely diabetic non-obese diabetic (NOD) mice prevents the development of insulin-dependent diabetes mellitus (IDDM) in NOD mice, as well as the recurrence of autoimmune diabetes in syngeneic islet-transplanted NOD mice. It has been demonstrated that the cytokine TGF-β, secreted from the cells of this clone, is the substance which prevents autoimmune IDDM. This investigation was initiated to determine the molecular role TGF-β plays in the prevention of autoimmune IDDM by determining its effect on IL-2-induced signal transduction in Con A-activated NOD mouse splenocytes and HT-2 cells. First, we determined whether TGF-β, secreted from NY4.2 T cells, inhibits IL-2-dependent T cell proliferation in HT-2 cells (IL-2-dependent T cell line) and NOD splenocytes. We found that TGF-β suppresses IL-2-dependent T cell proliferation. Second, we determined whether TGF-β inhibits the activation of Janus kinases (JAKs), as well as signal transducers and activators of transcription (STAT) proteins, involved in an IL-2-induced signalling pathway that normally leads to the proliferation of T cells. We found that TGF-β inhibited tyrosine phosphorylation of JAK1, JAK3, STAT3 and STAT5 in Con A blasts from NOD splenocytes and HT-2 cells. Third, we examined whether TGF-β inhibits the cooperation between STAT proteins and mitogen-activated protein kinase (MAPK), especially extra-cellular signal-regulated kinase 2 (ERK2). We found that TGF-β inhibited the association of STAT3 and STAT5 with ERK2 in Con A blasts from NOD splenocytes and HT-2 cells. On the basis of these observations, we conclude that TGF-β may interfere with signal transduction via inhibition of the IL-2-induced JAK/STAT pathway and inhibition of the association of STAT proteins with ERK2 in T cells from NOD splenocytes, resulting in the inhibition of IL-2-dependent T cell proliferation. TGF-β-mediated suppression of T cell activation may be responsible for the prevention of effector T cell-mediated autoimmune IDDM in NOD mice by TGF-β-producing CD4⁺suppressor T cells.