Laquinimod is an orally administered compound that is under investigation in relapsing-remitting multiple sclerosis. To understand the mechanism by which laquinimod exerts its clinical effects, we have performed human and murine studies assessing its immunomodulatory properties. In experimental autoimmune encephalomyelitis, the therapeutic administration of laquinimod beginning during the recovery of SJL mice, prevented further relapses as expected and strongly reduced infiltration of CD4+ and CD8+ T cells in the central nervous system. We hypothesized that this beneficial effect was mediated by dendritic cells, since we and others found a modulation of different dendritic cell subsets under treatment. According to the findings on antigen-presenting cells in the murine system, we found a reduced capacity of human monocyte-derived dendritic cells treated with therapeutic concentrations of laquinimod, upon maturation with lipopolysaccharide, to induce CD4+ T cell proliferation and secretion of pro-inflammatory cytokines. Furthermore, laquinimod treatment of mature dendritic cells resulted in a decreased chemokine production by both murine and human dendritic cells, associated with a decreased monocyte chemo-attraction. In laquinimod-treated patients with multiple sclerosis we consistently found reduced chemokine and cytokine secretion by conventional CD1c+ dendritic cells upon lipopolysaccharide stimulation. Similarly to the animal model of relapsing-remitting multiple sclerosis, dendritic cell subsets were altered in patients upon laquinimod treatment, as the number of conventional CD1c+ and plasmacytoid CD303+ dendritic cells were decreased within peripheral blood mononuclear cells. Moreover, laquinimod treatment in patients with multiple sclerosis and mice modified the maturation of dendritic cells demonstrated by an upregulation of CD86 expression in vivo. Our data suggest that inhibition of the NF-κB pathway is responsible for the changes observed in dendritic cell maturation and functions. These findings indicate that laquinimod exhibits its disease-modulating activity in multiple sclerosis by downregulating immunogenicity of dendritic cell responses. We suggest that monitoring dendritic cell properties in multiple sclerosis should be implemented in future therapeutic trials.