Dendritic cells (DCs) are recognized as major players in the regulation of immune responses to a variety of Ags, including bacterial agents. LPS, a Gram-negative bacterial cell wall component, has been shown to fully activate DCs both in vitro and in vivo. LPS-induced DC maturation involves activation of p38, extracellular signal-regulated kinase (ERK)/mitogen-activated protein kinases, and NF-kappaB. Blocking p38 inhibits LPS-induced maturation of DCs. In this study we investigated the role of LPS in the in vitro generation of immature DCs. We report here that in contrast to the observed beneficial effects on DCs, the presence of LPS in monocyte culture retarded the generation of immature DCs. LPS not only impaired the morphology and reduced the yields of the cultured cells, but also inhibited the up-regulation of surface expression of CD1a, costimulatory and adhesion molecules. Furthermore, LPS up-regulated the secretion of IL-1beta, IL-6, IL-8, IL-10, and TNF-alpha; reduced Ag presentation capacity; and inhibited phosphorylation of ERK, but activated p38, leading to a reduced NF-kappaB activity in treated cells. Neutralizing Ab against IL-10, but not other cytokines, partially blocked the effects of LPS. Inhibiting p38 (by inhibitor SB203580) restored the morphology, phenotype, and Ag presentation capacity of LPS-treated cells. SB203580 also inhibited LPS-induced production of IL-1beta, IL-10, and TNF-alpha; enhanced IL-12 production; and recovered the activity of ERK and NF-kappaB. Thus, our study reveals that LPS has dual effects on DCs that are biologically important: activating existing DCs to initiate an immune response, and inhibiting the generation of new DCs to limit such a response.