Inflammation triggered by microbial lipopolysaccharide (LPS) through Toll-like receptor (TLR) 4 in the presence of interferon (IFN)-gamma induces cytokine secretion in dendritic cells (DCs) tightly regulated by a defined differentiation program. This DC differentiation is characterized not only by a dynamic immune activating but also by tolerance-inducing phenotype associated with down-modulation of cytokines previously considered to be irreversible. CD40L on activated T cells further modifies DC differentiation. Using DNA micro-arrays, we showed down-regulated mRNA levels of TLR signalling molecules, whereas CD40/CD40L signalling molecules were up-regulated at a time when LPS/IFN-gamma-activated DCs had ceased cytokine expression. Accordingly, we demonstrated that CD40/CD40L but not TLR4 or TLR3 signalling mediated by LPS or poly (cytidylic-inosinic) acid (poly I:C) and dsRNA re-established the capacity for secreting interleukin (IL)-12 in primarily LPS/IFN-gamma-activated DCs, which have exhausted their potential for cytokine secretion. The resulting TH1 polarizing DC phenotype - which lacked accompanying secretion of the crucial immune suppressive factor IL-10 - maintained the potential for activation of cytotoxic T lymphocytes (CTLs). We therefore conclude that immune modulation is restricted to a secondary T-cell-mediated stimulus at an exhausted DC state, which prevents an immune tolerant DC phenotype. These findings impact on the rational design of TLR-activated DC-based cancer vaccines for the induction of anti-tumoural CTL responses.