Mice sensitized to OVA and subjected to acute OVA aerosol exposures develop allergic airway disease (AAD). However, chronic continuous Ag exposure results in resolution of AAD and the development of local inhalational tolerance (LIT). Because we have previously observed the persistence of B cells in the bronchoalveolar lavage (BAL) and hilar lymph nodes (HLN) at the resolution stage of this model, we investigated the role of B cells in the modulation of AAD. Although B cell-deficient mice developed LIT, adoptive transfer of HLN B cells from LIT mice to OVA-sensitized recipients resulted in attenuated AAD following subsequent OVA aerosol exposure, as determined by reduced BAL leukocytosis and eosinophilia, decreased tissue inflammation, and absent methacholine hyper-responsiveness. In similar adoptive transfer studies, HLN B cells from AAD mice were without effect. The protection transferred by LIT HLN B cells was Ag specific and was associated with accumulation of Foxp3(+) T regulatory cells regionally in BAL and HLN, but not systemically in the spleen. Fluorescent labeling of LIT HLN B cells before adoptive transfer demonstrated that these cells had the capacity to migrate to local inflammatory sites. In vitro assessment demonstrated that the LIT HLN B cells exerted this regulatory effect via TGF-beta induced conversion of CD4(+)CD25(-) T effector cells into functionally suppressive CD4(+)CD25(+)Foxp3(+) T regulatory cells. These findings illustrated a novel regulatory role for regional B cells in AAD and suggested a possible contributory role of B cells, along with other cell types, in the establishment of LIT.