Beneficial effects of non-pathogenic bacteria are increasingly recognized. We reported in a placebo-controlled study with atopic dermatitis (AD) patients that cutaneous exposure to lysates of non-pathogenic bacteria alleviates skin inflammation. To now unravel underlying mechanisms, immune consequences of sensing non-pathogenic bacterium Vitreoscilla filiformis lysate (Vf) were characterized analyzing (i) differentiation of dendritic cells (DC) and, consecutively, (ii) effector functions of DC and Th cells in vitro and in a murine model of AD in NC/Nga mice in vivo. Topical treatment with Vf significantly reduced AD-like inflammation in NC/Nga mice. Importantly, cutaneous exposure to Vf in combination with the allergen FITC significantly reduced also subsequent allergen-induced dermatitis indicating active immune modulation. Indeed, innate sensing of Vf predominantly induced IL-10 producing DC, which was dependent on TLR2-activation. Vf-induced IL-10+ DC primed naïve CD4+ T helper cells to become regulatory IFN-γ(low) IL-10(high) Tr1 cells. These IL-10(high) Tr1 cells were also induced by Vf in vivo and strongly suppressed T effector cells and inflammation. In conclusion we show that innate sensing of non-pathogenic bacteria by TLR2 induces tolerogenic DC and regulatory Tr1 cells suppressing T effector cells and cutaneous inflammation. These findings indicate a promising therapeutic strategy for inflammatory skin diseases like AD.Journal of Investigative Dermatology accepted article preview online, 28 June 2013; doi:10.1038/jid.2013.291.