The REIC/Dkk-3 gene has been reported to be a tumor suppressor and the expression is significantly down-regulated in a broad range of cancer cell types. The protein is secretory, but the physiological function remains unclear. This study demonstrated that recombinant REIC/Dkk-3 protein induced the differentiation of human CD14+ monocytes into a novel cell type (REIC/Dkk-3Mo). REIC/Dkk-3Mo resembles immature dendritic cells generated with IL-4 and GM-CSF. Both these cell populations exhibit similar proportions of CD11c+, CD40+, CD86+ and HLA-DR+ cells and endocytic capacity, but REIC/Dkk-3Mo is negative for CD1a antigen. An analysis of the signal transducers and activators of transcription (STAT) pathways revealed that REIC/Dkk-3 induces phosphorylation of STAT 1 and STAT 3. Furthermore, intratumoral administration of REIC/Dkk-3 protein significantly suppressed tumor growth with CD11c+ and CD8+ (dendritic and killer T cell marker, respectively) cell accumulation and enhanced anti-cancer cytolytic activity of splenocytes. These data indicated a cytokine-like role of REIC/Dkk-3 protein in monocyte differentiation that might be exploited therapeutically.