Oral tolerance is a physiological immune mechanism, which controls the outcome of deleterious hypersensitivity reactions to environmental antigens absorbed through the gastrointestinal tract, and maintains homeostasis. Using a mouse model of oral tolerance of delayed type hypersensitivity to contact allergens, i.e. haptens, we have examined the mechanisms involved in the induction of oral tolerance, both locally within the gut mucosa and systemically. We showed that intestinal epithelial cells from hapten-fed mice exert a bystander inhibition of hapten-primed T cell proliferation, through the release of anti-inflammatory cytokines, which may contribute to down regulation of local immune responses to soluble antigens. Furthermore, the lack of oral tolerance induction in MHC class II or Ii knock-out mice or in normal mice treated with a depleting anti-CD4 mAb, and the ability of these mice to mount a skin DTH following oral immunization with the hapten demonstrate that MHC class II restricted regulatory CD4+T cells play a central role in oral tolerance.