Increasing evidence suggests that altered immune function accompanies, and indeed may facilitate, cancer progression. In this study, we sought to determine the nature of, and cellular mechanisms underlying, changes in immune status during disease progression in a transgenic mouse model of prostate dysplasia. Immune cells in the tumor microenvironment, as well as in the secondary lymphoid tissues, displayed altered phenotypes. Although evidence of antitumor immunity was detected, there was a paradoxical decrease in the ability of T cells to proliferate in vitro at later stages of disease progression. Detailed analysis of the draining lumbar lymph nodes revealed an increased frequency and number of CD4 + + + CD25 + + + T cells and an enhanced production of inhibitory cytokines, which correlated with impaired T-cell function. Functional studies confirmed a role for CD4 + + + CD25 + + + regulatory T cells in suppressing T-cell proliferation as well as regulating the growth of transplanted prostate tumor cells. In addition, our studies show for the first time that anti-CD25 antibody treatment reduces, but does not prevent, tumor growth in a transgenic mouse model of prostate dysplasia. Taken together, this work provides compelling evidence that prostate tumor progression is accompanied by altered immune function and, moreover, that regulatory T cells play an important role in this process. These studies thus provide the impetus for development of specific and effective strategies to deplete regulatory T cells, or suppress their function, as an alternative or adjunct strategy for reducing tumor growth. (Cancer Res 2005; 65(7): 2947-55)