Hepatitis C virus (HCV) infection can persist despite HCV-specific T-cell immunity and can have a more aggressive course in persons coinfected with human immunodeficiency virus type 1 (HIV-1). Defects in antigen-presenting, myeloid dendritic cells (DCs) could underlie this T-cell dysfunction. Here we show that monocyte-derived DCs from persons with chronic HCV infection, with or without HIV-1 coinfection, being treated with combination antiretroviral therapy produced lower levels of interleukin 12 (IL-12) p70 in response to CD40 ligand (CD40L), whereas the expression of DC surface activation and costimulatory molecules was unimpaired. The deficiency in IL-12 production could be overcome by addition of gamma interferon (IFN-gamma) with CD40L, resulting in very high, comparable levels of IL-12 production by DCs from HCV- and HIV-1-infected subjects. Smaller amounts of IL-12 p70 were produced by DCs treated with the immune modulators tumor necrosis factor alpha and IL-1beta, with or without IFN-gamma, and the amounts did not differ among the uninfected and infected subjects. Blocking of IL-10 with an anti-IL-10 monoclonal antibody in the CD40L-stimulated DC cultures from HCV-infected persons increased the level of IL-12 p70 production. The ability of DCs from HCV-infected persons to stimulate allogeneic CD4+ T cells or induce IL-2, IL-5, or IL-10 in a mixed lymphocyte reaction was not impaired. Thus, myeloid DCs derived from persons with chronic HCV infection or with both HCV and HIV-1 infections have defects in IL-12 p70 production related to IL-10 activity that can be overcome by treatment of the DCs with CD40L and IFN-gamma. DCs from these infected subjects have a normal capacity to stimulate CD4+ T cells. The functional effectiveness of DCs derived from HCV-infected individuals provides a rationale for the DC-based immunotherapy of chronic HCV infection.