Cross-presentation of normal self and candidate tumor Ags by bone marrow (BM)-derived APCs that have not been activated has been demonstrated as a major mechanism contributing to acquisition of tolerance by mature T cells that first encounter an Ag in the periphery (cross-tolerance). Following adoptive transfer of naive TCR-transgenic CD8(+) T cells into a host expressing a transgenic Ag that is a potentially targetable tumor Ag in normal hepatocytes as a self-Ag, we found that the majority of Ag-specific CD8(+) T cells were deleted, with the remaining cells rendered anergic. Studies in BM chimeric mice and with purified cell populations demonstrated that these events were not dependent on cross-presentation by BM-derived APCs including Kupffer cells or liver sinusoidal endothelial cells, and apparently can occur entirely as a consequence of direct recognition of Ag endogenously processed and presented by hepatocytes. Direct recognition of Ag-expressing hepatocytes in vivo induced a proliferative response and up-regulation of activation markers in responding CD8(+) T cells, but proliferating cells did not accumulate, with most cells rapidly eliminated, and the persisting T cells lost the capacity to proliferate in response to repeated Ag stimulation. The results suggest that parenchymal tissues may retain the capacity to directly regulate in vivo responses to self-Ags processed and presented in the context of class I MHC molecules.