Human cytomegalovirus (HCMV) establishes a latent infection in hematopoietic cells, from which it can reactivate to cause significant disease in immunocompromised individuals. HCMV expresses a functional homolog of the immunosuppressive cytokine interleukin-10 (termed cmvIL-10), and alternate splicing of the cmvIL-10 transcript results in expression of a latency-associated cmvIL-10 transcript (LAcmvIL-10). To determine whether LAcmvIL-10 encodes immunosuppressive functions, recombinant LAcmvIL-10 protein was generated, and its impact on major histocompatibility complex class II (MHC-II) expression was examined on granulocyte macrophage progenitor cells (GM-Ps) and monocytes. LAcmvIL-10 (and cmvIL-10) downregulated MHC-II on the surfaces of both cell types. This downregulation was associated with a decrease in total MHC-II protein and transcription of components of the MHC-II biosynthesis pathway. Unlike cmvIL-10, LAcmvIL-10 did not trigger phosphorylation of Stat3, and its ability to downregulate MHC-II was not blocked by neutralizing antibodies to the human IL-10 receptor, suggesting that LAcmvIL-10 either does not engage the cellular IL-10 receptor or utilizes it in a different manner from cmvIL-10. The impact of LAcmvIL-10 on dendritic cell (DC) maturation was also assessed. In contrast to cmvIL-10, LAcmvIL-10 did not inhibit the expression of costimulatory molecules CD40, CD80, and CD86 and the maturation marker CD83 on DCs, nor did it inhibit proinflammatory cytokines (IL-1alpha, IL-1beta, IL-6 and tumor necrosis factor alpha). Thus, LAcmvIL-10 retains some, but not all, of the immunosuppressive functions of cmvIL-10. As GM-Ps and monocytes support latent infection, expression of LAcmvIL-10 may enable HCMV to avoid immune recognition and clearance during latency.