Although plasmacytoid dendritic cells (pDCs) express major histocompatibility complex class II (MHCII) molecules, and can capture, process, and present antigens (Ags), direct demonstrations that they function as professional Ag-presenting cells (APCs) in vivo during ongoing immune responses remain lacking. We demonstrate that mice exhibiting a selective abrogation of MHCII expression by pDCs develop exacerbated experimental autoimmune encephalomyelitis (EAE) as a consequence of enhanced priming of encephalitogenic CD4(+) T cell responses in secondary lymphoid tissues. After EAE induction, pDCs are recruited to lymph nodes and establish MHCII-dependent myelin-Ag-specific contacts with CD4(+) T cells. These interactions promote the selective expansion of myelin-Ag-specific natural regulatory T cells that dampen the autoimmune T cell response. pDCs thus function as APCs during the course of EAE and confer a natural protection against autoimmune disease development that is mediated directly by their ability to present of Ags to CD4(+) T cells in vivo.