Many researchers have speculated that the clinical progression from monoclonal gammopathy of undetermined significance (MGUS) to multiple myeloma (MM) is driven by defects in dendritic cell (DC) function. However, evidence supporting this assumption is controversial, and no mechanism for the putative DC dysfunction has been demonstrated thus far. We studied DC subsets from the bone marrow of MM patients compared with those of MGUS patients and control subjects. We found that myeloid DCs (mDCs) and plasmacytoid DCs (pDCs) accumulate in the bone marrow during the MGUS-to-MM progression. After engulfment of apoptotic tumor plasma cells via CD91, bone marrow mDCs and pDCs mature and are able to activate tumor-specific CD8⁺ T cells. However, by interacting directly with CD28 on live (nonapoptotic) tumor plasma cells, bone marrow mDCs downregulate the expression of proteasome subunits in these cells, thus enabling their evasion from human leukocyte antigen (HLA) class I–restricted CD8⁺ T-cell killing. These results suggest that DCs play a dual, but opposing, role in MM: for one, DCs activate CD8⁺ T cells against tumor plasma cells and, for the other, DCs protect tumor plasma cells from CD8⁺ T-cell killing. This information should be taken into account in designing immunotherapy approaches to enhance immune surveillance in MGUS and to break down immune tolerance in MM.