Pneumonia leads to high mortality in children under the age of five years worldwide, resulting in close to 20 percent of all deaths in this age group. Therefore, investigations into host-pathogen interactions during Streptococcus pneumoniae infection are key in devising strategies towards the development of better vaccines and drugs. To that end, in this study we investigated the role of S. pneumoniae and its surface antigen Pneumococcal surface protein A (PspA) in modulating the expression of co-stimulatory molecule Programmed Death Ligand 1 (PD-L1) expression on dendritic cells (DCs) and the subsequent effects of increased PD-L1 on key defence responses. Our data indicate that stimulation of DCs with PspA increases the surface expression of PD-L1 in a time and dose dependent manner. Characterization of mechanisms involved in PspA induced expression of PD-L1 indicate the involvement of Toll-Like Receptor 2 (TLR2) and calcium homeostasis. While calcium release from intracellular stores positively regulated PD-L1 expression, calcium influx from external milieu negatively regulated PD-L1 expression. Increase in PD-L1 expression, when costimulated with PspA and through TLR2 was higher than when stimulated with PspA or through TLR2. Further, knockdown of TLR2 and the intermediates in the TLR signaling machinery pointed towards the involvement of a MyD88 dependent pathway in PspA induced PD-L1 expression. Incubation of DCs with S. pneumoniae resulted in the up-regulation of PD-L1 expression, while infection with a strain lacking surface PspA failed to do so. Our data also suggests the role of PspA in ROS generation. These results suggest a novel and specific role for PspA in modulating immune responses against S. pneumoniae by regulating PD-L1 expression.