The roles of plasmacytoid dendritic cells (pDCs) and their response to interferon (IFN)-beta therapy in multiple sclerosis (MS) patients are poorly understood. We identified pDC accumulation in white matter lesions and leptomeninges of MS brains and abundant expression of the Type I IFN-induced protein MxA, mainly in perivascular CD3+ lymphocytes in lesions, indicating Type I IFN production by activated pDCs. The pDC chemoattractant chemerin was detected in intralesional cerebrovascular endothelial cells, and the chemerin receptor was expressed on infiltrating leukocytes, including pDCs. The effect of IFN-beta on pDC phenotype and function was evaluated in MS patients before and during IFN-beta treatment. Although IFN-beta did not modify the frequency and immature phenotype of circulating pDC, they showed lower expression of major histocompatibility complex Class II and blood-dendritic cell antigen 2 molecules and upregulation of CD38 and B7H1 costimulatory molecules. On exposure to CpG (a site where cytosine [C] lies next to guanine [G] in the DNA sequence [the p indicates that C and G are connected by a phosphodiester bond]) oligodeoxynucleotides in vitro, pDCs from IFN-beta-treated MS patients showed reduced expression of the pDC maturation markers CD83 and CD86 molecules; in vitro IFN-beta treatment of pDCs from healthy donors resulted in lower secretion of proinflammatory cytokines, including IFN-alpha, and a decreased ability to stimulate allogeneic T cells in response to maturative stimuli. These data indicate that IFN-beta modulates the immunologic functions of pDC, thus identifying pDCs as a novel target of IFN-beta therapy in MS patients.