Having discovered that the dendritic cell (DC)-associated heparan sulfate proteoglycan-dependent integrin ligand (DC-HIL) receptor on APCs inhibits T cell activation by binding to syndecan-4 (SD-4) on T cells, we hypothesized that the DC-HIL/SD-4 pathway may regulate autoimmune responses. Using experimental autoimmune encephalomyelitis (EAE) as a disease model, we noted an increase in SD-4(+) T cells in lymphoid organs of wild-type (WT) mice immunized for EAE. The autoimmune disease was also more severely induced (clinically, histologically, and immunophenotypically) in mice knocked out for SD-4 compared with WT cohorts. Moreover, infusion of SD-4(-/-) naive T cells during EAE induction into Rag2(-/-) mice also led to increased severity of EAE in these animals. Similar to SD-4 on T cells, DC-HIL expression was upregulated on myeloid cells during EAE induction, with CD11b(+)Gr-1(+) myeloid-derived suppressor cells (MDSCs) as the most expanded population and most potent T cell suppressor among the myeloid cells examined. The critical role of DC-HIL was supported by DC-HIL gene deletion or anti-DC-HIL treatment, which abrogated T cell suppressor activity of MDSCs, and also by DC-HIL activation inducing MDSC expression of IFN-γ, NO, and reactive oxygen species. Akin to SD-4(-/-) mice, DC-HIL(-/-) mice manifested exacerbated EAE. Adoptive transfer of MDSCs from EAE-affected WT mice into DC-HIL(-/-) mice reduced EAE severity to the level of EAE-immunized WT mice, an outcome that was precluded by depleting DC-HIL(+) cells from the infused MDSC preparation. Our findings indicate that the DC-HIL/SD-4 pathway regulates autoimmune responses by mediating the T cell suppressor function of MDSCs.