Summary. The mechanism by which a horse conceptus-derived immunosuppressive factor (HCS) of Mr > 100 000 inhibits lymphocyte proliferation was investigated. The factor was obtained from the culture supernatants of 20-day-old horse conceptuses; activity, identified by reduced uptake of [3H]thymidine by mitogen-stimulated lymphocytes, was greatest (P < 0\m=.\01) in cultures stimulated by mitogen from pokeweed. HCS also suppressed cell proliferation stimulated by phytohaemagglutinin (P < 0\m=.\01), but had no effect on lipopolysaccharide-stimulated cells (P > 0\m=.\05). Data from a fluorescence\x=req-\ activated cell sorter indicated that supplementation with HCS reduced the number of T cells in phytohaemagglutinin-stimulated cultures and suppressed proliferation of T and B cells in pokeweed-mitogen-stimulated cultures compared with controls. Cell proliferation was greater (P < 0\m=.\01) in cultures supplemented with HCS 24 h after stimulation than in those treated at the start of stimulation, and was even greater (P < 0\m=.\01) when cells were treated 48 h after stimulation. The removal of HCS from treated lymphocyte cultures resulted in complete recovery of cell responsiveness, and stimulated proliferation of treated cells did not differ (P > 0\m=.\05) from that of control cells. The addition of stimulated equine lymphocyte supernatant to cultures supplemented with HCS did not significantly increase (P > 0\m=.\05) cell proliferation in response to pokeweed mitogen.Addition of recombinant human interleukin 2 (rIL-2) to HCS-treated cultures did not alter the suppressive activity of HCS, although cell proliferation was greater in cultures supplemented with rIL-2 than in controls (P < 0\m=.\01). HCS inhibition of IL-2 receptor (IL-2R) function was investigated using an IL-2-dependent murine cytolytic T lymphocyte cell line; the fraction of HCS of Mr > 100 000 had no effect (P > 0\m=.\05) on proliferation of IL-2-dependent murine cytolytic T lymphocyte cells induced by rIL-2. Together, these data suggest that HCS suppresses proliferation of T lymphocytes during the early stages of cell activation by inhibiting IL-2R interaction and that this suppression interferes with interactions between T cells and B cells, thereby also indirectly inhibiting proliferation of B cells. The potent immunosuppressive capacity of HCS may be one factor responsible for inhibiting cell-mediated fetal allograft rejection during pregnancy.