Aryl hydrocarbon receptor (AhR) has an important role in the regulation of cell responses to different environmental stimuli, as well as to various endogenous ligands. Although AhR was previously implicated in the regulation of dendritic cell (DC) activation, very little is known about its potential role in the development of these cells. Here we report our unexpected findings that AhR may regulate the differentiation of plasmacytoid DCs (pDCs). Agonist of AhR markedly decreased the generation of pDCs in vitro, whereas the AhR antagonist had an opposite effect. The differentiation of conventional DCs (cDCs) was not affected. AhR-knockout mice had a substantial accumulation of pDCs in peripheral lymphoid organs; whereas no changes in cDCs were seen. Thus, this study has identified AhR as a transcription factor involved in the development of one population of DCs-pDCs.