Plasmacytoid dendritic cells (pDCs) are key regulators of antiviral immunity. They rapidly secrete IFN-alpha and cross-present viral Ags, thereby launching adaptive immunity. In this study, we show that activated human pDCs inhibit replication of cancer cells and kill them in a contact-dependent fashion. Expression of CD2 distinguishes two pDC subsets with distinct phenotype and function. Both subsets secrete IFN-alpha and express granzyme B and TRAIL. CD2(high) pDCs uniquely express lysozyme and can be found in tonsils and in tumors. Both subsets launch recall T cell responses. However, CD2(high) pDCs secrete higher levels of IL12p40, express higher levels of costimulatory molecule CD80, and are more efficient in triggering proliferation of naive allogeneic T cells. Thus, human blood pDCs are composed of subsets with specific phenotype and functions.