The role of thymic versus peripheral epithelium in the regulation of the antigen-specific CD8 T-cell repertoire is still largely unresolved. We generated TCR-beta chain transgenic mice in which an increased frequency of peripheral CD8 T cells recognizes an epitope from a viral oncoprotein (HPV16E7) in the context of H-2D(b) MHC class I. When T cells from these mice developed through the thymus of mice expressing functional E7 protein from a keratin 14 promoter, no major perturbation to transgenic T-cell development in the thymus was observed in these double-transgenic mice. In contrast, peripheral CD8 T-cell responses in the single-transgenic, K14E7 mice, including those unrelated to E7 antigen, are reduced whereas CD4 T-cell responses and antibody production are unchanged in these mice. Peripheral non-responsiveness among CD8 T cells was mediated largely by CD4(+)CD25(+) T cells. This suggested that epithelium expressing HPV16E7 protein induces Treg that specifically down-regulate CD8 T-cell responses in the periphery. This may have important consequences for the treatment of cervical pre-cancers and provides a model for understanding differential suppression of T and B lymphocyte subsets by Treg.