Dendritic cells (DCs) link innate and adaptive immunity, initiating and regulating effector cell responses. They ubiquitously express members of the LILR (ILT, LIR, CD85) family of molecules, some of which recognize self-HLA molecules, but little is known of their possible functions in DC biology. We demonstrate that the inhibitory receptor LILRB1 (ILT2, LIR1, CD85j) is selectively up-regulated during DC differentiation from monocyte precursors in culture. Continuous ligation of LILRB1 modulated cellular differentiation, conferred a unique phenotype upon the resultant cells, induced a profound resistance to CD95-mediated cell death, and inhibited secretion of cytokines IL-10, IL-12p70, and TGF-ß. These features remained stable even after exposure of the cells to bacterial LPS. Ligated DCs exhibited poor stimulatory activity for primary and memory T-cell proliferative responses, but this was substantially reversed by blockade of CD80 or its preferred ligand CTLA-4, or by depleting CD4+ CD25+ CD127lo regulatory T cells. Our findings suggest that ligation of LILRB1 on DCs by self-HLA molecules may play a key role in controlling the balance between the induction and suppression of adaptive immune responses.