In this study we have shown that activation of arthritogenic splenocytes with antigen and agonistic anti-CD40 gives raise to a B cell population that produce high levels of interleukin (IL)-10 and low levels of interferon (IFN)-γ. Transfer of these B cells into DBA/1-TcR-β-Tg mice, immunized with bovine collagen (CII) emulsified in complete Freund's adjuvant inhibited T helper type 1 differentiation, prevented arthritis development, and was also effective in ameliorating established disease. IL-10 is essential for the regulatory function of this subset of B cells, as the B cells population isolated from IL-10 knockout mice failed to mediate this protective function. Furthermore, B cells isolated from arthritogenic splenocytes treated in vitro with anti–IL-10/anti–IL-10R were unable to protect recipient mice from developing arthritis. Our results suggest a new role of a subset of B cells in controlling T cell differentiation and autoimmune disorders.