*Background:* Uncontrolled proliferation of T-cells is considered a barrier to the induction of transplantation tolerance by T regulatory cells. Therefore, cyclin kinase inhibitor p21, one of the most potent inhibitors of cell proliferation, may exert an important role in the induction/generation of T regulatory cells.
*Methods:* CD4^+^CD25^+^ and CD4^+^CD25^-^ cells were isolated from normal healthy blood donors (n=6), p21^-/-^ mice (n=9) and wild type mice (n=9). Proliferation with and without cyclosporine was quantified by ^3^H-thymidine uptake assay (expressed as counts per minute) and FoxP3 mRNA was studied by real-time quantitative RT-PCR. 
*Results:* The difference in proliferation (p<0.003) among CD4^+^CD25^+^ (15236 ± 1190) and CD4^+^CD25^-^ (50317 ± 974) T cells were proportionately similar to the difference in proliferation (p<0.001) of lymphocytes from wild type (28206 ± 2812) and p21^-/-^ mice (49624 ± 2164), proliferation of CD4^+^CD25^-^ and p21 deficient cells was resistant to cyclosporine. The number of T regulatory cells in p21^-/-^ mice were significantly (p<0.002) lower (2.6 ± 0.8%) than wild type mice (14.5 ± 1.6%,) and similar to CD4^+^CD25^-^ T cells, CD4^+^25^+^ T cells from p21^-/-^ mice lacked FoxP3 gene expression. T lymphocytes from wild type inhibited the proliferation of T lymphocytes from p21^-/-^ mice similar to the effect of CD4^+^CD25^+^ T cells on the proliferation of CD4^+^CD25^-^ cells. 
*Conclusions:* Presence of the p21 creates a milieu favorable for immune tolerance and consistent with antiproliferative and immunosuppressive effect of CD4^+^CD25^+^ T-regulatory cells. These findings support the notion that p21 could be used clinically in controlling allo-immune activation to achieve prolongation of graft survival
