Bacterial DNA contains unmethylated CpG dinucleotides and is a potent ligand for TLR9. Bacterial DNA has been claimed the active ingredient in bacterial lysates used for immunotherapy. Whereas the detection of viral DNA by TLR9 expressed in plasmacytoid dendritic cells (PDCs) with subsequent IFN-α production is well defined, the role of bacterial DNA during microbial infection is less clear. In fact, IFN-α is not a hallmark of antibacterial immune responses. Unlike in mice, TLR9 expression in humans is restricted to PDCs and B cells; thus, conclusions from murine models of infection have limitations. In this study, we demonstrate that lysates of heat-killed Escherichia coli containing bacterial DNA induced IFN-α in isolated PDCs but not in the mixed cell populations of human PBMCs. Depletion of monocytes restored IFN-α secretion by PDCs within PBMCs. We found that monocyte-derived IL-10 and PGs contribute to monocyte-mediated inhibition of IFN-α release in PDCs. We conclude that human PDCs can be stimulated by bacterial DNA via TLR9; however, in the physiological context of mixed-cell populations, PDC activation is blocked by factors released from monocytes stimulated in parallel by other components of bacterial lysates such as LPS. This functional repression of PDCs by concomitantly stimulated monocytes avoids production of antiviral IFN-α during bacterial infection and thus explains how the innate immune system is enabled to distinguish bacterial from viral CpG DNA and thus to elicit the appropriate responses despite the presence of CpG DNA in both types of infection.