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Objective To examine whether rheumatoid synovial fluid (SF) inhibits dendritic cell (DC) expression of the CD80 and CD86 costimulator molecules and contributes to SF T lymphocyte hyporesponsiveness. Methods Cell-free rheumatoid SF was tested for its effect on DC-stimulated autologous/allogeneic mixed lymphocyte reactions and for its effect on DC surface antigen expression, as assessed by flow cytometry. Blocking monoclonal antibodies were used to identify the SF cytokines that inhibited DC-T lymphocyte interactions. Results Low concentrations of SF (2.5%) could inhibit DC-mediated autologous and allogeneic T lymphocyte proliferation. This inhibitory effect could be reversed by neutralizing transforming growth factor (TGF) and interleukin-2 (IL-2), but not by IL-12, in the SF. Hyaluronic acid, IL-6, IL-10, and tumor necrosis factor were not associated with SF inhibition. In vitro culture alone and crosslinking with the CD40 ligand up-regulated DC CD80/CD86 expression and costimulator function, and this was not affected by inclusion of SF. In the presence of SF, DC clustered with autologous T lymphocytes showed decreased CD80 and CD86 expression, and variable CD80/CD86 decreases were observed on DC clustered with allogeneic T lymphocytes. Conclusions TGF in SF appears to suppress T lymphocyte function, which may affect both signaling to DC and the induction of DC costimulator function.