Dendritic cells (DCs) are leukocytes specialised in the uptake, processing, and presentation of antigen and fundamental in regulating both innate and adaptive immune functions. They are mainly localised at the interface between body surfaces and the environment, continuously scrutinising incoming antigen for the potential threat it may represent to the organism. In the respiratory tract, DCs constitute a tightly enmeshed network, with the most prominent populations localised in the epithelium of the conducting airways and lung parenchyma. Their unique localisation enables them to continuously assess inhaled antigen, either inducing tolerance to inoffensive substances, or initiating immunity against a potentially harmful pathogen. This immunological homeostasis requires stringent control mechanisms to protect the vital and fragile gaseous exchange barrier from unrestrained and damaging inflammation, or an exaggerated immune response to an innocuous allergen, such as in allergic asthma. During DC activation, there is upregulation of co-stimulatory molecules and maturation markers, enabling DC to activate naïve T cells. This activation is accompanied by chemokine and cytokine release that not only serves to amplify innate immune response, but also determines the type of effector T cell population generated. An increasing body of recent literature provides evidence that different DC subpopulations, such as myeloid DC (mDC) and plasmacytoid DC (pDC) in the lungs occupy a key position at the crossroads between tolerance and immunity. This review aims to provide the clinician and researcher with a summary of the latest insights into DC-mediated pulmonary immune regulation and its relevance for developing novel therapeutic strategies for various disease conditions such as infection, asthma, COPD, and fibrotic lung disease.