Even the most potent immunosuppressive drugs often fail to control graft-versus-host disease (GVHD), the most frequent and deleterious posttransplantation complication. We previously reported that photodepletion using dibromorhodamine (TH9402) eliminates T cells from healthy donors activated against major histocompatibility complex-incompatible cells and spares resting T cells. In the present study, we identified photodepletion conditions selectively eradicating endogenous proliferating T cells from chronic GVHD patients, with the concomittant sparing and expansion of CD4(+)CD25(+) forkhead box protein 3-positive T cells. The regulatory T-cell (Treg) nature and function of these photodepletion-resistant cells was demonstrated in coculture and depletion/repletion experiments. The mechanism by which Tregs escape photodepletion involves active P-glycoprotein-mediated drug efflux. This Treg-inhibitory activity is attributable to interleukin-10 secretion, requires cell-cell contact, and implies binding with cytotoxic T-lymphocyte antigen 4 (CTLA-4). Preventing CTLA-4 ligation abrogated the in vitro generation of Tregs, thus identifying CTLA-4-mediated cell-cell contact as a crucial priming event for Treg function. Moreover, the frequency of circulating Tregs increased in chronic GVHD patients treated with TH9402 photodepleted cells. In conclusion, these results identify a novel approach to both preserve and expand Tregs while selectively eliminating CD4(+) effector T cells. They also uncover effector pathways that could be used advantageously for the treatment of patients with refractory GVHD.