Genetically modified B cells are excellent tolerogenic antigen-presenting cells (APCs) in multiple models of autoimmunity. However, the mechanisms of action are still not completely understood. In our models, we generate antigen-specific tolerogenic B cells by transducing naïve or primed B cells with an antigen–immunoglobulin G (peptide–IgG) construct. In order to be transduced, B cells require activation with mitogens such as LPS. We and others have found that LPS stimulation of B cells upregulates the production of IL-10, a key cytokine for maintaining immune tolerance. In the current study, we defined the role of B-cell produced IL-10 in tolerance induction by using IL-10 deficient B cells as donor APCs. We found that peptide–IgG transduced IL-10 KO B cells have the same effects as wt B cells in tolerance induction in an experimental autoimmune encephalomyelitis model. Moreover, we demonstrated that the tolerogenic effect of peptide–IgG B cells was completely abrogated in anti-IL-10 receptor antibody treated recipients. Taken together, our results suggest that tolerance induced by peptide–IgG B-cell gene therapy requires IL-10 from the host but not donor B cells. These data shed important insights into the mechanisms of tolerance induction mediated by B-cell gene therapy