Dendritic cells (DCs) were prepared from human bronchoalveolar lavage (BAL) cells. We previously reported that, in particular, the CD1a fraction of the low autofluorescent (LAF) cells contains the precursors for DCs: after overnight culture, 40% of the LAF cells change into functionally and phenotypically prototypic dendritic/veiled cells. There are, as yet, no data on the modulatory effects of glucocorticoids (GC) on the maturation and function of such DCs isolated from the human lung. Functional tests (allogeneic mixed lymphocyte reaction: allo-MLR) were therefore performed with CD1a+ LAF cells at different stimulator-to-T-cell ratios and after preincubation with different dexamethasone (DEX) concentrations. DEX caused suppression of the T-cell stimulatory capacity of CD1a+ LAF cells, which was dose-dependent, and more evident at the higher stimulator-to-T-cell ratios. Here, we also show that CD80 and CD86 are normally expressed at low levels on CD1a+ LAF cell-derived DCs compared to other DC populations. This low-level expression of costimulatory molecules is discussed here in relation to the previously reported low-level expression of CD80 (and CD86) on lung DCs in experimental animals. This appears to play a role in a predominant Th2 cell stimulating potential of DC from the lung environment. DEX exposure of CD1a+ LAF cells prevented the upregulation of even this low-level expression of CD80 and CD86. The veiled/dendritic morphology and the expression of other relevant cell surface markers and adhesion molecules was not affected by DEX exposure. It is concluded that DEX hampers the maturation of CD1a+ LAF cells into active lung DCs.