In a biphasic, ovalbumin (OVA)-induced murine asthma model where allergic airway disease is followed by resolution and the development of local inhalational tolerance (LIT), transforming growth factor (TGF)-β-expressing CD5(+) B cells were selectively expanded locally in hilar lymph nodes (HLN) of LIT mice. LIT HLN CD5(+) B cells, but not LIT HLN CD5(-) B cells, induced expression of Foxp3 in CD4(+)CD25(-) T cells in vitro. These CD5(+) regulatory B cells (Breg) and CD4(+)Foxp3(+) T cells demonstrated similar increases in expression of chemokine receptors (CXCR4 and CXCR5) and co-localized in HLN B cell zones of LIT mice. The adoptive transfer of LIT HLN CD5(+) B cells, but not LIT HLN CD5(-) B cells, increased the number of CD4(+)Foxp3(+) T cells in the lung and inhibited airway eosinophilia in this OVA model. Thus, Breg in HLNs of LIT mice reside in a CD5(+) TGF-β-producing subpopulation and co-localize with CD4(+)Foxp3(+) T cells.