In healthy individuals, the non-classical MHC molecule HLA-G is only expressed on fetal trophoblast cells that invade the decidua during placentation. We show that a significant proportion of HLA-G at the surface of normal human trophoblast cells is present as a disulphide-linked homodimer of the conventional beta(2)m-associated HLA-I complex. HLA-G is a ligand for leukocyte immunoglobulin-like receptors (LILR), which bind much more efficiently to dimeric HLA-G than to conventional HLA-I molecules. We find that a LILRB1-Fc fusion protein preferentially binds the dimeric form of HLA-G on trophoblast cells. We detect LILRB1 expression on decidual myelomonocytic cells; therefore, trophoblast HLA-G may modulate the function of these cells. Co-culture with HLA-G(+) cells does not inhibit monocyte-derived dendritic cell up-regulation of HLA-DR and costimulatory molecules on maturation, but did increase production of IL-6 and IL-10. Furthermore, proliferation of allogeneic lymphocytes was inhibited by HLA-G binding to LILRB1/2 on responding antigen-presenting cells (APC). As HLA-G is the only HLA-I molecule that forms beta(2)m-associated dimers with increased avidity for LILRB1, this interaction could represent a placental-specific signal to decidual APC. We suggest that the placenta is modulating maternal immune responses locally in the uterus through HLA-G, a trophoblast-specific, monomorphic signal present in almost every pregnancy. See accompanying commentary: (http://dx.doi.org/10.1002/eji.200737515).