The differentiation of monocytes into dendritic cells (DC) is a key mechanism by which the innate immune system instructs the adaptive T cell response. In this study, we investigated whether leukocyte Ig-like receptor A2 (LILRA2) regulates DC differentiation by using leprosy as a model. LILRA2 protein expression was increased in the lesions of the progressive, lepromatous form vs the self-limited, tuberculoid form of leprosy. Double immunolabeling revealed LILRA2 expression on CD14+, CD68+ monocytes/macrophages. Activation of LILRA2 on peripheral blood monocytes impaired GM-CSF induced differentiation into immature DC, as evidenced by reduced expression of DC markers (MHC class II, CD1b, CD40, and CD206), but not macrophage markers (CD209 and CD14). Furthermore, LILRA2 activation abrogated Ag presentation to both CD1b- and MHC class IIrestricted, Mycobacterium leprae-reactive T cells derived from leprosy patients, while cytokine profiles of LILRA2-activated monocytes demonstrated an increase in TNF-α, IL-6, IL-8, IL-12, and IL-10, but little effect on TGF-β. Therefore, LILRA2 activation, by altering GM-CSF-induced monocyte differentiation into immature DC, provides a mechanism for down-regulating the ability of the innate immune system to activate the adaptive T cell response while promoting an inflammatory response.