Trafficking of T cells to the CNS and their reactivation by antigen-presenting cells play an essential role in the pathology of multiple sclerosis (MS). We previously reported that CD14⁺ monocytes can differentiate into CD83⁺CD209⁺ myeloid dendritic cells (mDCs) after transmigration across the blood-brain barrier endothelial cells (BBB-ECs) and these mDCs promote the expansion of Th1 and Th17 cells. Here we investigated the function of plasmacytoid DCs (pDCs). Human CD14⁺ peripheral blood monocytes were co-cultured with TNF-α/IFN-γ-activated BBB-ECs, isolated and phenotyped by FACS. Some of monocytes were shown to be CD83^-CD123⁺, a phenotype compatible with pDCs. The expression of IDO and TGF-β in those monocyte-derived CD123⁺ pDCs was significant higher than in freshly isolated monocytes. Furthermore, in situ immunostainings of MS CNS samples demonstrated the presence of numerous CD123⁺IDO⁺ pDCs in the perivascular spaces of active MS lesions. Human memory CD4⁺ T cells co-cultured with pDCs showed increased IL-4, decreased INF-γ and enhanced number of CD25⁺Foxp3⁺ Tregs compared to when co-cultured with monocytes, suggesting that monocyte-derived pDCs exhibit anti-inflammatory properties. On the other hand, co-culture of anti-CD3 activated CD4⁺ T cells with pDCs increased the proportion of IFN-γ⁺ and/or IL-17⁺ cells in CD25⁺Foxp3⁺ cells. Finally, to examine the function of pDCs in experimental autoimmune encephalomyelitis (EAE) mice, PDCA1⁺B220⁺ pDCs were collected from the CNS of EAE mice. CD4⁺ T cells co-cultured with pDCs exhibited anti-inflammatory properties as shown by the lower expression of pro-inflammatory cytokines such as IFN-γ and TNF-α, suggesting that pDCs in the CNS during EAE also exert the anti-inflammatory effects. Our data suggest the possibility that monocytes differentiate into pDCs when migrating across activated BBB-ECs, and that these pDCs induce functional regulation of the CD4 lymphocyte compartment.