Steady-state development of plasmacytoid dendritic cells (pDCs) and conventional dendritic cells (cDCs) requires the ligand for FMS-like tyrosine kinase 3 receptor (flt3L), but little is known about how other cytokines may also control this process. In this study, we show that IL-2 inhibits the development of both pDCs and cDCs from bone marrow cells under flt3L stimulation, by acting on lineage(-) flt3(+) precursors. This inhibition of DC development by IL-2 requires IL-2Rα and IL2Rβ. IL-2Rα is specifically expressed in one stage of the DC precursor: the monocyte and DC progenitors (MDPs). Furthermore, more MDPs are found in flt3L-stimulated bone marrow cultures when IL-2 is present, suggesting that IL-2 may be inhibiting DC development at the MDP stage. Consistent with our in vitro findings, we observe that nonobese diabetic (NOD) mice, which express less IL-2 compared with diabetes-resistant NOD.Idd3/5 mice, have more splenic pDCs. Additionally, DCs developed in vitro in the presence of flt3L and IL-2 display reduced ability to stimulate T-cell proliferation compared with DCs developed in the presence of flt3L alone. Although the addition of IL-2 does not increase the apoptosis of DCs during their development, DCs developed in the presence of IL-2 are more prone to apoptosis upon interaction with T cells. Together our data show that IL-2 can inhibit both the development and the function of DCs. This pathway may have implications for the loss of immune tolerance: Reduced IL-2 signaling may lead to increased DC number and T-cell stimulatory capacity.