The present invention provides methods and compositions for converting a T cell into a cell that exhibits at least one regulatory T cell phenotype. The converted T cell is generated by contacting a T cell with a cell that is modified to comprise an agent capable of activating PD1 signaling in a T cell. The converted T cell is useful for preventing, suppressing, blocking or inhibiting an immune response. For example the converted T cell is useful for preventing rejection of a transplanted tissue in a human or other animal host, or protecting against graft versus host disease. The converted T cell can also be used to treat autoimmune diseases.