Abstract Ig-like transcript 3 (ILT3) is an inhibitory receptor expressed by tolerogenic dendritic cells. When human CD8+ T cells are allostimulated in the presence of recombinant ILT3-Fc protein, they differentiate into antigenic specific T suppressor (Ts) cells that inhibit CD4 and CD8 T cell effector function both in vitro and in vivo. ILT3-Fc–induced CD8+ Ts cells express high amounts of BCL6 that are crucial to their function. Knockdown of BCL6 from unprimed human T cells prevents their differentiation into Ts cells, whereas ex vivo overexpression of BCL6 converts CD8+ T cells into Ts cells. NOD/SCID mice transplanted with human pancreatic islets and humanized by injection of human PBMCs tolerate the graft and develop BCL6high CD8+ Ts cells when treated with ILT3-Fc before or after the onset of rejection. This indicates that ILT3-Fc acts through BCL6 and is a potent immunosuppressive agent for reversing the onset of allo- or possibly autoimmune attacks against pancreatic islets.