Although mature dendritic cells (DCs) are potent initiators of adaptive immune response, immature steady-state DCs contribute to immune tolerance. In this study, we show that ex vivo splenic DCs are capable of inducing conversion of naïve CD4⁺ T cells to adaptive Foxp3⁺CD4⁺ regulatory T cells (aTreg) in the presence of TGF-β. In particular, when compared with splenic CD8α⁻ DCs, the CD8α⁺ DC subset were superior in inducing higher frequencies of conversion. This was not attributable to the difference in basal level of costimulation, because deficiency of CD40 or CD80/86 signaling did not diminish the differential induction of Foxp3. Conversion was regulated by DC maturation status. Further insights into the molecular mechanisms of conversion were gained by analyzing the contribution of several costimulatory and coinhibitory receptors. Costimulatory signals through GITR suppressed conversion, whereas coinhibitory signaling via programmed death 1 ligand (PD-L1) but not PD-L2 was required for conversion. Ex vivo PD-L1^−/− DCs failed to support Foxp3 induction in the presence of TGF-β. In vivo blocking PD-L1 signaling abolished conversion in a tumor-induced aTreg conversion model. Collectively, this study highlights the cellular and molecular parameters that might be exploited to control the de novo generation of aTregs and peripheral tolerance.