Interferon-γ (IFN-γ) is the sole representative of type II IFNs, with well recognized role in numerous inflammatory processes. Lately, its significant pleiotropic nature has been recognized in many scenarios, where IFN-γ contributes to maintenance or induction of tolerogenic responses in context of various immune cell types. In this manuscript we demonstrate, that IFN-γ-mediated induction of programmed death ligand 1 (PD-L1) on human monocyte-derived dendritic cells (DCs) represents an important tolerogenic aspect in immunological network of type II IFNs. When fully differentiated, immature DCs were treated with increasing concentrations of IFN-γ there was no sign of maturation, as revealed by CD80, CD83 and CD86 expression. In terms of co-stimulatory receptor response, we did observe a dose-dependent increase in CD40 expression. Phenotypic analysis of inhibitory molecules revealed that PD-L1 expression is particularly sensitive to IFN-γ, as its expression can be induced almost 10-fold in comparison to non-treated DCs. Functional analysis of such PD-L1high DCs revealed significant immunosuppressive properties in a mixed lymphocyte reaction with whole or memory CD4+ T cells. When IFN-γ treated DCs were co-cultured with naive CD4+CD45RA+ T cells, they induced an increased percentage of CD4+CD25+CD127-FoxP3+ Tregs. Inhibition of PD-1/PD-L1 axis using neutralizing anti-PD-L1 mAbs, reversed the immunosuppressive effect of IFN-γ-treated DCs to suppress CD4+ T cell proliferation and to induce Tregs. In summary, our findings demonstrate the importance of IFN-γ-mediated tolerogenic effects, exerted on DCs by inducing increased expression of PD-L1, which enhances their regulatory function.