The induction of alloantigen-specific unresponsiveness remains an elusive goal in organ transplantation. Here we identify plasmacytoid dendritic cells (pDCs) as phagocytic antigen-presenting cells essential for tolerance to vascularized cardiac allografts. Tolerizing pDCs acquired alloantigen in the allograft and then moved through the blood to home to peripheral lymph nodes. In the lymph node, alloantigen-presenting pDCs induced the generation of CCR4+ CD4+CD25+Foxp3+ regulatory T cells (Treg cells). Depletion of pDCs or prevention of pDC lymph node homing inhibited peripheral Treg cell development and tolerance induction, whereas adoptive transfer of tolerized pDCs induced Treg cell development and prolonged graft survival. Thus, alloantigen-presenting pDCs home to the lymph nodes in tolerogenic conditions, where they mediate alloantigen-specific Treg cell development and allograft tolerance.