Naturally occurring CD4(+)CD25(+)FoxP3(+) T regulatory (Treg) cells require three distinct signals transduced via TCR, CD28, and IL-2R for their development and maintenance. These requirements served as the basis for several recently developed ex vivo expansion protocols that relied on the use of solid support-bound Abs to CD3 and CD28 in the presence of high dose IL-2. We report in this study that Treg cells up-regulate the expression of inducible costimulatory receptor 4-1BB in response to IL-2, and stimulation using this receptor via a novel form of 4-1BB ligand (4-1BBL) fused to a modified form of core streptavidin (SA-4-1BBL) was effective in expanding these cells up to 110-fold within 3 wk. Expanded cells up-regulated CD25, 4-1BB, and membranous TGF-beta, suppressed T cell proliferation, and prevented the rejection of allogeneic islets upon adoptive transfer into graft recipients. Importantly, SA-4-1BBL rendered CD4(+)CD25(-) T effector cells refractive to suppression by Treg cells. This dual function of signaling via 4-1BB, vis-à-vis Treg cell expansion and licensing T effector cells resistant to Treg cell suppression, as well as the up-regulation of 4-1BB by IL-2 may serve as important regulatory mechanisms for immune homeostasis following antigenic challenge. Stimulation using a soluble form of SA-4-1BBL represents a novel approach to expand Treg cells with potential therapeutic applications in autoimmunity and transplantation.