Dendritic cells (DCs) determine whether antigen presentation leads to immune activation or to tolerance. Tolerance-inducing DCs (also called regulatory DCs) act partly by generating regulatory T lymphocytes (Tregs). The mechanism used by DCs to switch toward regulatory DCs during their differentiation is unclear. We show here that human DCs treated in vitro with glucocorticoids produce the glucocorticoid-induced leucine zipper (GILZ). Antigen presentation by GILZ-expressing DCs generates CD25(high)FOXP3(+)CTLA-4/CD152(+) and interleukin-10-producing Tregs inhibiting the response of CD4(+) and CD8(+) T lymphocytes. This inhibition is specific to the antigen presented, and only proliferating CD4(+) T lymphocytes express the Treg markers. Interleukin-10 is required for Treg induction by GILZ-expressing DCs. It is also needed for the suppressive function of Tregs. Antigen-presenting cells from patients treated with glucocorticoids generate interleukin-10-secreting Tregs ex vivo. These antigen-presenting cells produce GILZ, which is needed for Treg induction. Therefore, GILZ is critical for commitment of DCs to differentiate into regulatory DCs and to the generation of antigen-specific Tregs. This mechanism may contribute to the therapeutic effects of glucocorticoids.