The severity of allergic asthma is driven by the balance between allergen-specific T regulatory (Treg) and T helper (Th)2 cells. However, it is unclear whether specific subsets of conventional dendritic cells (cDCs) promote the differentiation of these two T cell lineaeges. We have identified a subset of lung resident type 2 cDCs (cDC2s) that display high levels of CD301b and have potent Treg-inducing activity ex vivo. Single cell RNA sequencing and adoptive transfer experiments show that during allergic sensitization, many CD301b+ cDC2s transition in a stepwise manner to CD200+ cDC2s that selectively promote Th2 differentiation. GM-CSF augments the development and maintenance of CD301b+ cDC2s in vivo, and also selectively expands Treg-inducing CD301b+ cDC2s derived from bone marrow. Upon their adoptive transfer to recipient mice, lung-derived CD301b+ cDC2s confer immunological tolerance to inhaled allergens. Thus, GM-CSF maintains lung homeostasis by increasing numbers of Treg-inducing CD301b+ cDC2s.