Graves' disease (GD) is one of the most common autoimmune diseases. The immune dysfunction in GD involves the generation of thyroid-stimulating hormone receptor (TSHR) autoantibodies that presumably arise consequent to interactions among dendritic cells (DCs), T cells, and regulatory T (Treg) cells. However, the immunological mechanisms of interactions between them that lead to the induction and regulation of this autoimmune disease are poorly defined. In this study, we investigated whether DCs are the main cause of the defective activity of Treg cells in GD patients. We found a significant decrease in the percentage of circulating CD4(+)CD25(+)FOXP3(+) Treg cells in untreated GD patients (uGD), which was negatively correlated with the concentration of TSHR autoantibodies. uGD-derived DCs were polarized to increase the number of plasmacytoid DCs (pDCs) and conferred the ability to abrogate the suppressive function of Treg cells through inducing apoptosis of CD4(+)CD25(+) Treg cells in an IFN-α-dependent manner, and elevated thyroid hormones further exacerbated the effect. The nucleotide UDP, which inhibits IFN-α secretion of pDCs through P2Y6 receptor signaling, restored the suppressive function of CD4(+)CD25(+) Treg cells. Collectively, uGD-derived DCs through pDC polarization and elevated thyroid hormones act in concert to impair the regulatory capacity of Treg cells, facilitating the production of TSHR autoantibodies in the pathogenesis of GD.