Recently, a novel type of dendritic antigen-presenting cell has been identified in the dermis of normal human and mouse skin. These dermal dendritic cells (DDC) occur in higher numbers than epidermal Langerhans cells, represent a distinct differentiation pathway of dendritic cells, and are as potent as Langerhans cells in the activation of superantigen specific T cells. As yet, nothing is known about their capacity to take up, process, and present soluble protein antigens. We used the model of tetanus toxoid (TT) driven T cell proliferation to address these questions. To test for active internalization of TT protein, gold labeled TT was incubated with Langerhans cells and DDC and could be traced to multivesicular endo-lysosomal compartments. DDC internalize TT through a receptor-mediated, clathrin-independent pathway, whereas Langerhans cells predominantly use macropinocytosis. To verify that DDC process TT by the exogenous pathway of antigen presentation, we pulsed DDC with TT protein or TT peptide after preincubation with chloroquine. Preincubation with chloroquine diminished the capacity of DDC to induce TT protein specific T cell proliferation (70-80%), but was not effective to suppress TT peptide induced T cell responses. DDC were as potent as Langerhans cells and 5-10 x more potent than plastic adherent monocytes in the presentation of TT to autologous resting T cells. Furthermore, as few as 50 DDC (stimulator:responder ratio of 1:1000) were able to induce a significant TT specific T cell proliferation. Because a subpopulation of DDC expresses low levels of CD1a, a phenotypic marker of Langerhans cells, sorting of CD1a positive and negative DDC was performed. On a per cell basis, CD1a positive and negative DDC were equally potent at mediating TT specific T cell proliferation. Thus, DDC are able to internalize, process, and present soluble protein antigens such as TT and may therefore play an important role in the regulation of skin immune responses.