Cordyceps sinensis (CS), a Chinese tonifying herb, has been widely used for centuries in Asian countries as a medicine and a health supplement. Although ample evidence indicates that CS can modulate immune responses, the functional effect of CS on dendritic cells (DCs) is still unclear. This study examines how CS affects human monocyte-derived DCs in two physiological states: naïve and LPS-induced inflammatory. Our experimental results demonstrate that CS acts as an activator and maturation inducer of immature DCs by stimulating the expression of costimulatory molecules and proinflammatory cytokines by DCs, enhancing the DC-induced, allogeneic T cell proliferation, and reducing the endocytic ability of DCs. In contrast, CS suppresses the LPS-induced, inflammatory response by decreasing the LPS-induced expression of costimulatory molecules and proinflammatory cytokines by DCs. CS also suppresses the LPS-induced, DC-elicited, allogeneic T cell proliferation and shifts the LPS-activated, DC-driven Th1 response toward a Th2 response. These results demonstrate that CS differentially regulates the DC activities according to the presence or absence of the inflammatory signs. Restated, with the lack of an ongoing inflammatory environment, CS primes DCs toward a Th1-type immunity, whereas in a potential inflammatory reaction, CS balances the over-reactivity of elicited Th1 immunity. This investigation illustrates the Yin-Yang balancing effects of CS as a medicine and a health supplement.