Estrogen (E2)-induced immunomodulation involves dual effects on antigen-presenting cells (APC) and CD4(+)CD25(+) regulatory T cells (Treg) but not a direct effect on effector T cells. In this report, we further investigated the effects of E2 on APC and Treg function. We found that E2 treatment in vivo strongly reduced recovery of APC from the peritoneal cavity and inhibited induction of the inflammatory cytokines interleukin (IL)-12 and interferon-gamma but enhanced secretion of IL-10. Moreover, E2-conditioned bone marrow-derived dendritic cells (BM-DC) could both enhance Treg activity and directly inhibit responder T cells in the absence of Treg cells. We examined whether this E2-induced inhibitory activity of BM-DC might involve costimulation through the recently described PD-1 pathway. Both E2 and pregnancy markedly enhanced PD-1 expression in several types of APC, including macrophages, B cells, and especially dendritic cells (DC). Similarly to E2-induced enhancement of FoxP3 expression and experimental autoimmune encephalomyelitis protection, E2-induced enhancement of PD-1(+) cells was also mediated through estrogen receptor alpha (Esr1) in DC and macrophages but not in B cells. Based on antibody inhibition studies, PD-1 interaction with its ligands, PDL-1 and especially PDL-2, could mediate either positive or negative regulatory signaling in both mature and immature E2-conditioned DC, depending, respectively, on a relatively high (10:1) or low (1:1) ratio of T cells:BM-DC. These novel findings indicate that E2-induced immunomodulation is mediated in part through potentiation in BM-DC of the PD-1 costimulatory pathway.