In healthy individuals, T cells react against incoming pathogens, but remain tolerant to self-antigens, thereby preventing autoimmune reactions. CD4 regulatory T cells are major contributors in induction and maintenance of peripheral tolerance, but a regulatory role has been also reported for several subsets of CD8 T cells. To determine the molecular basis of peripheral CD8 T-cell tolerance, we exploited a double transgenic mouse model in which CD8 T cells are neonatally tolerized following interaction with a parenchymal self-antigen. These tolerant CD8 T cells have regulatory capacity and can suppress T cells in an antigen-specific manner during adulthood. Dickkopf-3 (DKK3) was found to be expressed in the tolerant CD8 T cells and to be essential for the observed CD8 T-cell tolerance. In vitro, genetic deletion of DKK3 or blocking with antibodies restored CD8 T-cell proliferation and IL-2 production in response to the tolerizing self-antigen. Moreover, exogenous DKK3 reduced CD8 T-cell reactivity. In vivo, abrogation of DKK3 function reversed tolerance, leading to eradication of tumors expressing the target antigen and to rejection of autologous skin grafts. Thus, our findings define DKK3 as a immune modulator with a crucial role for CD8 T-cell tolerance.