Induction of Ag-specific regulatory T cells (iTregs) by vaccination is a promising strategy for treating autoimmune diseases. We previously demonstrated that DNA and protein covaccination converted naive T cells to Ag-specific iTregs by inducing CD11c+CD40(low)IL-10+ regulatory dendritic cells (DCregs). However, it is unclear how coimmunization induces the DCregs. In this paper, we report that the event is initiated by coentry of sequence-matched DNA and protein immunogens into the same DC via caveolae-mediated endocytosis, which leads to inhibition of phosphorylation of caveolin-1 (Cav-1), the main component of caveolae, and upregulation of Tollip. This triggers downstream signaling that upregulates suppressor of cytokine signaling 1 and downregulates NF-κB and STAT-1α. Silencing either Cav-1 or Tollip blocks the negative signaling, leading to upregulated expression of CD40, downregulated production of IL-10, and loss of iTreg-inducing function. We further show that DCregs can be induced in culture from primary DCs and JAWS II DC lines by feeding them sequence-matched DNA and protein immunogens. The in vitro-generated DCregs are effective in ameliorating autoimmune and inflammatory diseases in several mouse models. Our study thus suggests that DNA and protein coimmunization induces DCregs through Cav-1- and Tollip-mediated negative signaling. It also describes a novel method for generating therapeutic DCregs in vitro.