Tolerogenic dendritic cells (DCs) play an important role in maintaining peripheral tolerance through the induction/activation of regulatory T cells (Treg). Endogenous factors contribute to the functional development of tolerogenic DCs. In this report, we present evidence that two known immunosuppressive neuropeptides, the vasoactive intestinal peptide (VIP) and the pituitary adenylate cyclase-activating polypeptide (PACAP), contribute to the development of bone marrow-derived tolerogenic DCs in vitro and in vivo. The VIP/PACAP-generated DCs are CD11c(low)CD45RB(high), do not up-regulate CD80, CD86, and CD40 following LPS stimulation, and secrete high amounts of IL-10. The induction of tolerogenic DCs is mediated through the VPAC1 receptor and protein kinase A, and correlates with the inhibition of IkappaB phosphorylation and of NF-kappaBp65 nuclear translocation. The VIP/PACAP-generated DCs induce functional Treg in vitro and in vivo. The VIP/DC-induced Treg resemble the previously described Tr1 in terms of phenotype and cytokine profile, suppress primarily Th1 responses including delayed-type hypersensitivity, and transfer suppression to naive hosts. The effect of VIP/PACAP on the DC-Treg axis represents an additional mechanism for their general anti-inflammatory role, particularly in anatomical sites which exhibit immune deviation or privilege.