Hepatic stellate cells (HSCs) are critical for hepatic wound repair and tissue remodeling. They also produce cytokines and chemokines that may contribute to the maintenance of hepatic immune homeostasis and the inherent tolerogenicity of the liver. The functional relationship between HSCs and the professional migratory APCs in the liver, i.e. dendritic cells (DCs), has not been evaluated. Here, we report that murine liver DCs co-localize with HSCs in vivo under normal, steady-state conditions, and cluster with HSCs in vitro. In vitro, HSCs secrete high levels of DC chemoattractants, such as MIP1α and MCP-1, as well as cytokines that modulate DC activation, including TNFα, IL-6 and IL-1β. Culture of HSCs with conventional liver myeloid (m) DCs resulted in increased IL-6 and IL-10 secretion compared to that of either cell population alone. Co-culture also resulted in enhanced expression of co-stimulatory (CD80, CD86) and co-inhibitory (B7-H1) molecules on mDCs. HSC-induced mDC maturation required cell-cell contact and could be blocked, in part, by neutralizing MIP1α or MCP-1. HSC-induced mDC maturation was dependent on activation of STAT3 in mDCs and in part on HSC-secreted IL-6. Despite up-regulation of co-stimulatory molecules, mDCs conditioned by HSCs demonstrated impaired ability to induce allogeneic T cell proliferation, which was independent of B7-H1, but dependent upon HSC-induced STAT3 activation and subsequent up-regulation of IDO. In conclusion, by promoting IDO expression, HSCs may act as potent regulators of liver mDCs and function to maintain hepatic homeostasis and tolerogenicity.