Antiestrogens are universally used to treat estrogen receptor--positive breast cancer, but relapses occur commonly due to the development of drug resistance. The ability of antiestrogen to induce transforming growth factor beta (TGFbeta) in breast cancer cells may be relevant to the emergence of resistance, not only at the level of cell autonomous effects of TGFbeta on cancer progression but also at the level of its effects on the host immune system. To evaluate the potential role of tumor-derived, antiestrogen-induced TGFbeta as an immune suppressor, we established in vitro mixed lymphocyte tumor reactions (MLTR) using MCF-7 cells and peripheral blood mononuclear cells (PBMC), as well as tumor tissue and autologous tumor infiltrating lymphocytes (TIL) obtained from primary breast cancer biopsies. In allogeneic MLTR, antiestrogen-treated MCF-7 cells caused downregulation of the effector molecules granzyme B, perforin, and Fas ligand in CD8(+) T cells, and suppressed the generation of cytotoxic effector cells in a TGFbeta-dependent manner. Furthermore, we documented induction of regulatory T cells in CD4(+) T cells, based on Foxp3 expression and T-cell activation in cocultures. In autologous MLTR, antiestrogen treatment gave rise to enhanced Foxp3 expression of TIL/PBMC and decreased the number of apoptotic tumor cells. These effects were reversed by addition of a TGFbeta neutralizing antibody. Our findings offer evidence that antiestrogen induces immunosuppression in the tumor microenvironment, through a TGFbeta-dependent mechanism that may contribute to the development of antiestrogen resistance in breast cancer.