Goblet cells are secretory epithelial cells of mucosal tissues that confer protection from environmental agents or pathogens via expression and secretion of soluble mucins. Loss of these cells is associated with several chronic inflammatory disorders of the mucosa. Although demonstrated to transfer antigens from the luminal surface to stromal cells in the intestinal mucosa, it is not known if goblet cells contribute to the regulation of an immune response. In this study we report that similar to intestinal and respiratory mucosal epithelia, mouse ocular surface epithelia predominantly express the TGF-ß2 isoform. Specifically, we demonstrate the ability of goblet cells to express TGF-ß2 and increase it in response to Toll-Like Receptor 4 mediated stimulus in cultures. Goblet cells not only express TGF-ß2, but are also able to activate it in a thrombospondin-1 (TSP-1) dependent manner via their cell surface receptor CD36. Furthermore, goblet cell derived soluble factors that possibly include TGF-ß2, alter dendritic cell (DC) phenotype to a tolerogenic type by downregulating DC expression of MHC class II and co-stimulatory molecules CD80, CD86 and CD40. Thus our study demonstrates goblet cells as a cellular source of active TGF-ß2 in ocular mucosa and implicates their immunomodulatory function in maintaining mucosal immune homeostasis.