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Dendritic cells (DC) are unique in their ability to prime naive T cells and initiate adaptive immunity. In recent years, DC were identified in the inflamed central nervous system (CNS), but their role in the initiation or regulation of the tissue specific immune response is unknown. As shown here, DC isolated from mice with experimental autoimmune encephalomyelitis (EAE) exhibit a maturational phenotype similar to immature bone marrow-derived DC or splenic DC as characterized by intermediate surface MHC class II and low expression of the costimulatory molecule CD80. However, they are unable to prime naive T cells. Moreover, they inhibit T cell proliferation stimulated by mature bone marrow-derived DC. TGFbeta, IL-10 and TRAIL were found to significantly contribute to the CNS-DC-mediated inhibition of allo-T cell proliferation. Thus CNS-DC may be the key responsibles for maintaining immune privilege within the inflamed CNS.