TNF is a pleiotropic cytokine with differential effects on immune cells and diseases. Anti-TNF therapy was shown to be effective in rheumatoid arthritis but proved inefficient or even detrimental in other autoimmune diseases. We studied the role of TNF in the induction of Ag-specific regulatory T cells (Tregs) by tolerogenic vitamin D3-modulated human dendritic cells (VD3-DCs), which previously were shown to release high amounts of soluble TNF (sTNF) upon maturation with LPS. First, production of TNF by modulated VD3-DCs was analyzed upon maturation with LPS or CD40L with respect to both secreted (cleaved) TNF (sTNF) and expression of the membrane-bound (uncleaved) form of TNF (mTNF). Next, TNF antagonists were tested for their effect on induction of Ag-specific Tregs by modulated DCs and the subsequent functionality of these Tregs. VD3-DCs expressed greater amounts of mTNF than did control DCs (nontreated DCs), independent of the maturation protocol. Inhibition of TNF with anti-TNF Ab (blocking both sTNF and mTNF) during the priming of Tregs with VD3-DCs prevented generation of Tregs and their suppression of proliferation of CD4+ T cells. In contrast, sTNF receptor II (sTNFRII), mainly blocking sTNF, did not change the suppressive capacity of Tregs. Blocking of TNFRII by anti-CD120b Ab during Treg induction similarly abrogated their subsequent suppressive function. These data point to a specific role for mTNF on VD3-DCs in the induction of Ag-specific Tregs. Interaction between mTNF and TNFRII instructs the induction of suppressive Tregs by VD3-DCs. Anti-TNF therapy may therefore act adversely in different patients or disease pathways.