A breakdown in intestinal homeostasis can result in chronic inflammatory diseases of the gut including inflammatory bowel disease, coeliac disease and allergy. Dendritic cells, through their ability to orchestrate protective immunity and immune tolerance in the host, have a key role in shaping the intestinal immune response. The mechanisms through which dendritic cells can respond to environmental cues in the intestine and select appropriate immune responses have until recently been poorly understood. Here, we review recent work that is beginning to identify factors responsible for intestinal conditioning of dendritic-cell function and the subsequent decision between tolerance and immunity in the intestine.