Cyclooxygenase 2 (COX-2) overexpression and production of prostaglandin E(2) (PGE(2)) by head and neck squamous cell carcinomas (HNSCC) induce type 1 regulatory T (Tr1) cells and contribute to carcinogenesis by creating a tolerogenic milieu. To test this hypothesis, CD4(+)CD25(-) T cells obtained from the peripheral blood of 10 normal donors were cocultured with autologous dendritic cells, irradiated HNSCC cells and cytokines, interleukin 2 (IL-2), IL-10, and IL-15. HNSCC cells were either COX-2 negative, constitutively expressed COX-2, were transfected with COX-2, or had COX-2 expression knocked down by small interfering RNA. Other modifications included coculture plus or minus the COX-inhibitor, Diclofenac, or synthetic PGE(2) in the absence of HNSCC. Lymphocytes proliferating in 10-day cocultures were phenotyped by flow cytometry, studied for cytokine production by ELISA and for suppressor function in CFSE inhibition assays plus or minus anti-IL-10 or anti-transforming growth factor-beta(1) (TGF-beta(1)) monoclonal antibodies (mAb). COX-2(+) HNSCC or exogenous PGE(2) induced outgrowth of Tr1 cells with the CD3(+)CD4(+)CD25(-)IL2Rbeta(+)IL2Rgamma(+)FoxP3(+)CTLA-4(+)IL-10(+)TGF-beta(1)(+)IL-4(-) phenotype and high suppressor functions (range, 46-68%). Small interfering RNA knockout of COX-2 gene in HNSCC led to outgrowth of lymphocytes with decreased IL2Rgamma (P = 0.0001), FoxP3 (P = 0.05), and IL-10 (P = 0.035) expression and low suppressor activity (range, 26-34%). Whereas COX-2(+) cocultures contained IL-10 and TGF-beta(1) (medians, 615 and 824 pg/mL), cytokine levels were decreased (P < 0.0001) in COX-2(-) cocultures. Inhibition of COX-2 enzymatic activity in HNSCC abrogated outgrowth of Tr1 cells. Neutralizing mAbs to IL-10 and/or TGF-beta(1) abolished Tr1-mediated suppression. COX-2 overexpression in HNSCC plays a major role in the induction of Tr1 cells in the tumor microenvironment.