Plasmacytoid DCs (pDCs) have been implicated as crucial cells in antiviral immune responses. On recognizing HIV, they become activated, secreting large amounts of IFN-alpha and inflammatory cytokines, thereby potentiating innate and adaptive antiviral immune responses. Here, we have shown that HIV-stimulated human pDCs can also induce the differentiation of naive CD4(+) T cells into Tregs with suppressive function. This differentiation was independent of pDC production of IFN-alpha and primarily dependent on pDC expression of indoleamine 2,3-dioxygenase, which was induced through the TLR/MyD88 pathway, following binding of HIV to CD4 and triggering of TLR7 by HIV genomic RNA. Functionally, the Tregs induced by pDCs were shown to inhibit the maturation of bystander conventional DCs. This study therefore reveals what we believe to be a novel mechanism by which pDC may regulate and potentially limit anti-HIV immune responses.