B cells regulate immune responses by producing antigen-specific antibodies(1). However, specific B-cell subsets can also negatively regulate T-cell immune responses, and have been termed regulatory B cells(2-4). Human and mouse regulatory B cells (B10 cells) with the ability to express the inhibitory cytokine interleukin-10 (IL-10) have been identified(2-5). Although rare, B10 cells are potent negative regulators of antigen-specific inflammation and T-cell-dependent autoimmune diseases in mice(5-7). How B10-cell IL-10 production and regulation of antigen-specific immune responses are controlled in vivo without inducing systemic immunosuppression is unknown. Using a mouse model for multiple sclerosis, here we show that B10-cell maturation into functional IL-10-secreting effector cells that inhibit in vivo autoimmune disease requires IL-21 and CD40-dependent cognate interactions with T cells. Moreover, the ex vivo provision of CD40 and IL-21 receptor signals can drive B10-cell development and expansion by four-million-fold, and generate B10 effector cells producing IL-10 that markedly inhibit disease symptoms when transferred into mice with established autoimmune disease. The ex vivo expansion and reinfusion of autologous B10 cells may provide a novel and effective in vivo treatment for severe autoimmune diseases that are resistant to current therapies.