The remarkable functional plasticity of professional antigen-presenting cells (APCs) allows the adaptive immune system to respond specifically to an incredibly diverse array of potential pathogenic insults; nonetheless, the specific molecular effectors and mechanisms that underpin this plasticity remain poorly characterized. Cytotoxic T-lymphocyte-associated protein-4 (CTLA-4), the target of the blockbuster cancer immunotherapeutic ipilimumab, is one of the most well-known and well-studied members of the B7 superfamily and negatively regulates T cell responses by a variety of known mechanisms. Although CTLA-4 is thought to be expressed almost exclusively among lymphoid lineage hematopoietic cells, a few reports have indicated that nonlymphoid APCs can also express the CTLA-4 mRNA transcript and that transcript levels can be regulated by external stimuli. In this study, we substantially build upon these critical observations, definitively demonstrating that mature myeloid lineage dendritic cells (DC) express significant levels of intracellular CTLA-4 that they constitutively secrete in microvesicular structures. CTLA-4(+) microvesicles can competitively bind B7 costimulatory molecules on bystander DC, resulting in downregulation of B7 surface expression with significant functional consequences for downstream CD8(+) T-cell responses. Hence, the data indicate a previously unknown role for DC-derived CTLA-4 in immune cell functional plasticity and have significant implication for the design and implementation of immunomodulatory strategies intended to treat cancer and infectious disease.