Accumulating data have shown that the microenvironment of dendritic cells modulates subtype differentiation and CD1 expression, but the mechanisms by which exogenous factors confer these effects are poorly understood. Here we describe the dependence of CD1a- monocyte-derived dendritic cell (moDC) development on lipids associated with the expression of peroxisome proliferator-activated receptor-gamma (PPARgamma). We also show the consecutive differentiation of immature CD1a-PPARgamma+ moDCs to CD1a+PPARgamma- cells limited by serum lipoproteins and terminated by proinflammatory cytokines. Immature CD1a- moDCs possess higher internalizing capacity than CD1a+ cells, whereas both activated subtypes have similar migratory potential but differ in their cytokine and chemokine profiles, which translates to distinct T-lymphocyte-polarizing capacities. CD1a+ moDCs stand out by their capability to secrete high amounts of IL-12p70 and CCL1. As lipoproteins skew moDC differentiation toward the generation of CD1a-PPARgamma+ cells and inhibit the development of CD1a+PPARgamma- cells, we suggest that the uptake of lipids results in endogenous PPARgamma agonists that induce a cascade of gene transcription coordinating lipid metabolism, the expression of lipid-presenting CD1 molecules, subtype dichotomy, and function. The presence of CD1a-PPARgamma+ and CD1a+PPARgamma- DCs in lymph nodes and in pulmonary Langerhans cell histiocytosis confirms the functional relevance of these DC subsets in vivo.