Dendritic cells (DC) play pivotal roles in the induction and regulation of both innate and acquired immunity. DC express several cell-surface immune inhibitory receptors. However, little is known about their potential immunoregulatory functions in the context of T-cell activation. Here we report that murine gp49B, a member of the immunoglobulin superfamily, harboring immunoreceptor tyrosine-based inhibitory motifs, is expressed on DC and downregulates cellular activity to prevent the excessive activation of T cells in vitro and in vivo. Bone marrow-derived DC (BMDC) from newly generated gp49B-deficient (gp49B(-/-)) mice induced enhanced proliferation and IL-2 release of antigen-specific CD4(+) and CD8(+) T cells compared with BMDC from wild-type mice, in a cell-cell contact manner. The enhanced proliferation by gp49B(-/-) BMDC was also observed in allogeneic CD4(+) and CD8(+) T cells. Moreover, the transfer of allogeneic BALB/c splenocytes into C57BL/6 gp49B(-/-) mice induced severe acute graft-versus-host disease with an augmented upregulation of CD86 on CD11c(+) splenic gp49B(-/-) DC, while transfer of C57BL/6 gp49B(-/-) splenocytes into BALB/c mice did not, suggesting the exacerbation of the disease was due, at least in part, to augmented activation of recipient gp49B(-/-) DC. These findings demonstrate a novel regulatory role of gp49B in the function of DC.