Dendritic cells are able to present Ag-derived peptides on MHC class I and II molecules and induce T cells priming. Lipopolysaccharides (LPS), an activator of Toll-like 4 receptor (TLR4) signaling, has been demonstrated to facilitate Ag-presentation, up-regulate surface molecules expression but impair T cells priming. In this study, we investigated the effect of LPS on nicotine-enhanced DCs-dependent T cells priming and the mechanisms of LPS orchestrating the immunosuppressive program. We could demonstrate that the treatment with LPS resulted in increased surface molecules expression, enhanced Ag-presentation, up-regulated release of TGF-beta, TNF-alpha, IL-6, and IFN-beta. Concomititantly, the upregulation of IFN-beta in DCs induces the up-regulation of coinhibitory molecules B7H1 and GITRL, which cause an impaired activation of naïve Ag-specific T cells and the induction of T cell tolerance by enhancing B7H1-PD-1 interactions and promoting GITRL-GITL facilitated Treg generation, respectively. These data provide a mechanistic basis for the immunomodulatory action of IFN-beta which might open new possibilities in the development of therapeutic approaches aimed at the control of excessive immune response and persistent infection.