Retroviruses have developed immunmodulatory mechanisms to avoid being attacked by the immune system. The mechanisms of this retrovirus-associated immune suppression are far from clarified. Dendritic cells (DCs) have been attributed a decisive role in these pathogenic processes. We have used the Friend retrovirus (FV) mouse model in order to acquire further knowledge about the role of infection of DCs in virus-induced immunosuppression. About 20% of the myeloid DCs that were generated from the bone marrow of FV-infected mice carried FV proteins. The infection was productive, and infected DCs transmitted the virus in cell culture and in vivo. FV infection of DCs led to a defect in DC maturation, as infected cells expressed very little costimulatory molecules. Live imaging analysis of the cell contact between DCs and T cells revealed prolonged contacts of T cells with infected DCs compared with uninfected DCs. Although naive T cells were still activated by FV-infected DCs, this activation did not result in antigen-specific T-cell proliferation. Interestingly, infected DCs expanded a population of Foxp3(+) regulatory T cells with immunosuppressive potential, suggesting that the contact between naive T cells and retrovirus-infected DCs results in tolerance rather than immunity. Thus, retroviral infection of DCs leads to an expansion of regulatory T cells, which might serve as an immune escape mechanism of the virus.