The use of human umbilical cord blood as an alternative source of stem cells to bone marrow for the reconstitution of the immune system is associated with less frequent and less severe incidence of graft-versus-host disease (GVHD). This study focuses on aspects of cord blood T-cell biology that may contribute to a perceived increased tolerance associated with the neonatal immune response. A skewing of the T-helper (Th)1/Th2 phenotype of cord blood T cells towards a Th2 response has frequently been cited as a possible cause. In this study, primary and repeated stimulation via the T-cell receptor (TCR) complex induced a Th0-type cytokine response, with both adult and cord blood-derived naïve T cells producing interferon gamma (IFN-gamma), interleukin 4 (IL-4) and IL-5. IL-10 was induced in cord blood T-cell cultures during primary stimulation, while adult T cells began to secrete IL-10 only after repeated stimulation. The presence of the antigen-presenting cell (APC)-derived cytokine IL-1beta inhibited IL-10 production by cord blood cells. The effects of IL-12 and IL-4 on T-cell cytokine responses were also examined. In addition to their differential Th1/Th2 skewing effects on cord and adult T cells, both cytokines augmented IL-10 production in both T-cell populations. These findings demonstrate that cord blood T cells may secrete large amounts of the anti-inflammatory cytokine IL-10 and that the presence of IL-1beta or Th1/Th2 skewing cytokines can regulate its production. This data provides support for the recognized tolerant nature of the newborn immune response that may contribute to the reduced incidence of GVHD associated with cord blood transplantation.