Interferon (IFN) consensus sequence-binding protein (ICSBP) is an important transcription factor regulating proinflammatory cytokine production and the development of mononuclear phagocytes in vitro. Here we analyzed the role of ICSBP in the in vivo differentiation of 3 major subsets of murine dendritic cells (DCs). We found that ICSBP is predominantly expressed by the CD8alpha(+) subset, and more important, that ICSBP(-/-) mice have a profound and selective deficiency in CD8alpha(+) DEC205(+) DCs in lymphoid tissues. Studies using wild-type/ICSBP(-/-) chimeras revealed that this defect in CD8alpha(+) DC development is intrinsic to bone marrow-derived progenitors and not dependent on ICSBP expression in the nonhemopoietic compartment. Because DC precursor frequencies are unaltered in the bone marrow of ICSBP(-/-) mice, ICSBP appears to function by regulating CD8alpha(+) DC differentiation downstream from the generation of common DC progenitors. Although CD8alpha(-) DCs are present in normal numbers in ICSBP(-/-) animals, up-regulation of CD40, CD80, and major histocompatibility complex (MHC) class II expression was found to be impaired in this subset after in vivo microbial stimulation. Together these results demonstrate that ICSBP is critically required for the in vivo differentiation of CD8alpha(+) DCs and may also influence the functional maturation of the CD8alpha(-) subsets.