Plasmacytoid DC (pDC) are type-I IFN-producing cells known for their capacity to promote anti-viral innate and adaptive immune responses. Despite their potent anti-viral function, when compared with conventional DC, pDC exhibit poor immunostimulatory ability and their interaction with T cells often favors the generation of Treg. pDC are activated primarily in response to ssRNA and ssDNA through TLR7 and TLR9, respectively, but also through TLR-independent mechanisms. Non-lymphoid tissue pDC, such as those residing in the airways, gut, and liver, play a significant role in regulating mucosal immunity and are critical for the development of tolerance to inhaled or ingested antigens. Herein we discuss properties that define tolerogenic pDC and how their unique characteristics translate into an ability to regulate immunity and promote the development of tolerance. We cover the importance of pDC during intrathymic Treg development and the maintenance of peripheral tolerance, as well as their regulatory role in transplantation, autoimmunity, and cancer. We highlight recent findings regarding danger-associated molecular pattern and PAMP signaling in the regulation of pDC function, and how the ability of pDC to promote tolerance translates into the potential clinical applications of these cells as therapeutic targets to regulate immune reactivity.