The ability of dendritic cells (DC) to initiate immune responses or induce immune tolerance is strictly dependent on their maturation state. TNF-alpha plays a pivotal role in the differentiation and maturation of DC. Blockade of TNF-alpha action may arrest DC in an immature state, prolonging their window of tolerogenic opportunity. Immature DC (imDC) were transfected with recombinant adenovirus to express soluble TNF-alpha receptor type I (sTNFRI), a specific inhibitor of TNF-alpha. The capacity of sTNFRI gene-modified imDC (DC-sTNFRI) to induce immune tolerance was analyzed. sTNFRI expression renders imDC resistant to maturation induction and impairs their capacity to migrate or present Ag. This process leads to induction of allogeneic T cell hyporesponsiveness and the generation of IL-10-producing T regulatory-like cells. In vivo pretreatment of transplant recipients with DC-sTNFRI induces long-term survival of cardiac allografts in 50% of cases, and leads to a substantial increase in the generation of microchimerism and T regulatory cell numbers. Thus, blockade of TNF-alpha action by sTNFRI genetic modification can inhibit the maturation of DC and potentiate the in vivo capacity of imDC to induce donor-specific immune tolerance and prolong allograft survival.