Alternatively activated macrophages (AAM) accumulate in tissues during Th2-associated immune responses like helminth infections and allergic disorders. These cells differentiate in response to interleukin 4 (IL-4)/IL-13–mediated activation of Stat6 and possess potent inhibitory activity against T cells. The molecular mechanism that leads to T-cell suppression remains unclear and could involve soluble factors or inhibitory ligands. Microarray analysis revealed that the inhibitory ligand, programmed death ligand 2 (PD-L2) was strongly induced by IL-4 in macrophages from wild-type but not Stat6-deficient mice. PD-L2 expression correlated with other established markers for AAM-like Relm-α/Fizz1, arginase1, or Ym1 and thereby serves as useful surface marker to identify and isolate AAM from tissues. Antibodies against PD-L2 blocked the inhibitory activity of AAM and retroviral expression of PD-L2 in macrophages from Stat6^−/− mice was sufficient to inhibit T-cell proliferation, which demonstrates that PD-L2 mediates potent and nonredundant inhibition of T cells independently of other Stat6-regulated genes. Infection of conditional IL-4/IL-13–deficient mice with the helminth Nippostrongylus brasiliensis further showed that PD-L2 expression was dependent on IL-4/IL-13 from Th2 cells. In vivo blockade of PD-L2 during N brasiliensis infection caused an enhanced Th2 response in the lung, indicating that AAM inhibit Th2 cells by expression of PD-L2.