A tolerogenic peptide, hCDR1, ameliorated murine lupus via the upregulation of functional regulatory cells and by immunomodulating cytokine production. In the present study we analyzed the ability of hCDR1 to similarly affect gene expression and regulatory T cells when incubated with peripheral blood mononuclear cells (PBMC) of lupus patients. To this end, peripheral blood mononuclear cells (PBMC) of 11 lupus patients and five gender- and age-matched healthy controls were cultured with hCDR1 or a control peptide. Gene expression and regulatory T-cells were assessed. hCDR1 significantly downregulated interleukin (IL)-1beta, interferon (IFN)-gamma, and IL-10 gene expression. Furthermore, hCDR1 upregulated the expression of the anti-apoptotic Bcl-xL molecule and downregulated the pro-apoptotic caspase-3, resulting in reduced rates of apoptosis. hCDR1 increased the expression of transforming growth factor (TGF)-beta, FoxP3 and the negative regulators Foxj1 and Foxo3a. No significant effects were observed using a control peptide or when PBMC of healthy donors were incubated with hCDR1. The elevated gene expression of FoxP3 was due to hCDR1-induced upregulation of TGF-beta, resulting in an increase of CD4+CD25+FoxP3+ functional, regulatory cells. The ability of the regulatory cells to diminish IFN-gamma expression and to upregulate TGF-beta was abrogated after the addition of a neutralizing anti-CD25 antibody, confirming their role in the beneficial effects of hCDR1.