Ligation of CD40 on dendritic cells (DCs) induces early production of inflammatory mediators via canonical NF-κB signaling, as well as late expression of the anti-inflammatory enzyme indoleamine 2,3-dioxygenase (IDO) via unknown signal transduction. By selective blocking of either the canonical NF-κB pathway using the NEMO-binding domain peptide or the noncanonical NF-κB pathway by small interfering RNA, we demonstrate that IDO expression requires noncanonical NF-κB signaling. Also, noncanonical NF-κB signaling down-regulates proinflammatory cytokine production in DCs. In addition, selective activation of the noncanonical NF-κB pathway results in noninflammatory DCs that suppress T-cell activation and promote the development of T cells with regulatory properties. These findings reveal an important role of the noncanonical NF-κB pathway in the regulation of immunity.