The tolerogenic hepatic microenvironment impedes clearance of viral infections but is an advantage in viral vector gene transfer, which often results in immune tolerance induction to transgene products. Although the underlying tolerance mechanism has been extensively studied, our understanding of antigen presentation to transgene product-specific CD4⁺ T cells remains limited. To address this, we administered hepatotropic adeno-associated virus (AAV8) vector expressing cytoplasmic ovalbumin (OVA) into wt mice followed by adoptive transfer of transgenic OVA-specific T cells. We find that that the liver-draining lymph nodes (celiac and portal) are the major sites of MHC II presentation of the virally encoded antigen, as judged by in vivo proliferation of DO11.10 CD4⁺ T cells (requiring professional antigen-presenting cells, e.g., macrophages) and CD4⁺CD25⁺FoxP3⁺ Treg induction. Antigen presentation in the liver itself contributes to activation of CD4⁺ T cells egressing from the liver. Hepatic-induced Treg rapidly disseminate through the systemic circulation. By contrast, a secreted OVA transgene product is presented in multiple organs, and OVA-specific Treg emerge in both the thymus and periphery. In summary, liver draining lymph nodes play an integral role in hepatic antigen presentation and peripheral Treg induction, which results in systemic regulation of the response to viral gene products.