In humans and mice, γδ T cells represent <5% of the total circulating lymphocytes. In contrast, the γδ T cell compartment in ruminants accounts for 15–60% of the total circulating mononuclear lymphocytes. Despite the existence of CD4+CD25high Foxp3+ T cells in the bovine system, these are neither anergic nor suppressive. We present evidence showing that bovine γδ T cells are the major regulatory T cell subset in peripheral blood. These γδ T cells spontaneously secrete IL-10 and proliferate in response to IL-10, TGF-β, and contact with APCs. IL-10–expressing γδ T cells inhibit Ag-specific and nonspecific proliferation of CD4+ and CD8+ T cells in vitro. APC subsets expressing IL-10 and TFG-β regulate proliferation of γδ T cells producing IL-10. We propose that γδ T cells are a major regulatory T cell population in the bovine system.