Studies have shown that CD4⁺ CD25⁺ regulatory T cells (Tregs) could inhibit cytokine-induced killer (CIK) cells against tumor cells, but minimal data have been reported on the underlying mechanisms. The purpose of this study was to investigate the potential suppressive mechanisms of cord blood Tregs on CIK cells in vivo and in vitro. The in vitro study demonstrated that Tregs were normally proliferated and had potent suppressive characteristics. CD4⁺ CD25⁺ LAP⁺ cells were highly expressed as part of activated Tregs, which limited CIK cell-mediated cytotoxicity and reduced the expression of the NKG2D receptor. Interestingly, the inhibitory ability of Tregs could be mimicked by soluble TGF-β1 and neutralizing TGF-β1 antibody could abrogate the inhibitory function of Tregs on CIK cells. In vivo results showed that adoptively transferred CIK cells could delay the tumor growth in nude mice. Moreover, depletion of CD4⁺ CD25⁺ Tregs in preculture or blockade of TGF-beta 1 strikingly enhanced CIK cells cytotoxicity. These data indicate that Tregs inhibit CIK cells cytotoxicity mainly by down regulating the expression of NKG2D receptor in a TGF-β dependent manner.