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Background: Mesenchymal stem cells have prominent immune modulatory properties, which may have clinical applications; however their major source, bone marrow, is of limited availability. On the other hand, mesenchymal stem cells derived from human exfoliated deciduous teeth (SHEDs) are readily accessible, but their immune regulatory properties have not been completely investigated. This study was designed, therefore, to evaluate the SHEDs influence on DCs differentiation, maturation, ability to activate T cells and to expand CD4+Foxp3+ T cells. Methodology/Principal Findings: The experiments were based in cellular co-culture during differentiation and maturation of monocyte derived-DCs (moDCs), with, or not, presence of SHEDs. After co-culture with SHEDs, (moDCs) presented lower expression of BDCA-1 and CD11c, in comparison to DC cultivated without SHEDs. CD40, CD80, CD83 and CD86 levels were also decreased in mature DCs (mDCs) after co-cultivation with SHEDs. To assess the ability of SHEDs-exposed moDCs to modulate T cell responses, the former were separated from SHEDs, and co-cultured with peripheral blood lymphocytes. After 5 days, the proliferation of CD4+ and CD8+ T cells was evaluated and found to be lower than that induced by moDCs cultivated without SHEDs. In addition, an increase in the proportion of CD4+Foxp3+IL-10+ T cells was observed among cells stimulated by mature moDCs that were previously cultivated with SHEDs. Soluble factors released during co-cultures also showed a reduction in the pro-inflammatory cytokines (IL-2, TNF-α and IFN-γ), and an increase in the anti-inflammatory molecule IL-10. Conclusion/Significance: This study shows that SHEDs induce an immune regulatory phenotype in moDCs cells, evidenced by changes in maturation and differentiation rates, inhibition of lymphocyte stimulation and ability to expand CD4+Foxp3+ T cells. Further characterization and validation of this phenomenon could support the use of SHEDs, directly or indirectly for immune modulation in the clinical practice. [ABSTRACT FROM AUTHOR]