We have investigated the role of type I IFNs (IFN-α and-β) in human T cell differentiation using anti-CD3 mAb and allogeneic, in vitro-derived dendritic cells (DC) as APCs. DC were very efficient activators of naive CD4+ T cells, providing necessary costimulation and soluble factors to support Th1 differentiation and expansion. Addition of IFN-αβ to DC/T cell cultures resulted in induction of T cell IL-10 production and inhibition of IFN-γ, TNF-α, and LT secretion. Diminished T cell IFN-γ production correlated with IFN-αβ-mediated inhibition of the p40 chain of the IL-12 heterodimer secreted by DC. Suppression of p40 IL-12 and IFN-γ was not due to increased levels of IL-10 in these cultures, and production of IFN-γ could be restored by exogenous IL-12. These data indicate that type I IFNs inhibit DC p40 IL-12 expression, which is required for development of IFN-γ-producing CD4+ T cells. Furthermore, when T cells were restimulated without IFN-β, these cells induced less p40 IL-12 from DC, suggesting that the functional properties of T cells may regulate DC function. Thus, IFN-αβ inhibits both IL-12-dependent and independent Th1 cytokine production and provides a mechanism for inhibition of IL-12-mediated immunity in viral infections.