Plasmacytoid dendritic cells (PDC), natural type-1 interferon (IFN) producing cells, could play a role in the innate anti-HIV immune response. Previous reports indicated that PDC IFN production is induced by HIV. Our results show a more robust IFN induction when purified PDC (>95%) were exposed to HIV-infected cells. This effect was not observed with non-viable cells, DNA, and RNA extracted from infected cells, and viral proteins. The response was blocked by anti-CD4 and neutralizing anti-gp120 antibodies as well as soluble CD4. IFN induction by HIV-infected cells was also prevented by low-dose chloroquine, which inhibits endosomal acidification. PDC IFN release resulted in reduced HIV production by infected CD4+ cells, supporting an anti-HIV activity of PDC. Stimulated CD4+ cells induced PDC activation and maturation; markers for PDC migration (CCR7) were enhanced by HIV-infected CD4+ cells only. This latter finding could explain the decline in circulating PDC in HIV-infected individuals.