T helper (Th)17 cells producing interleukin (IL)-17 play a role in autoimmune and allergic inflammation. Here, we show that IL-23 induces IL-17 in the lung and IL-17 is required during antigen sensitization to develop allergic asthma, as shown in IL-17R–deficient mice. Since IL-17 expression increased further upon antigen challenge, we addressed its function in the effector phase. Most strikingly, neutralization of IL-17 augmented the allergic response in sensitized mice. Conversely, exogenous IL-17 reduced pulmonary eosinophil recruitment and bronchial hyperreactivity, demonstrating a novel regulatory role of IL-17. Mechanistically, IL-17 down modulated eosinophil-chemokine eotaxin (CCL11) and thymus- and activation-regulated chemokine/CCL17 (TARC) in lungs in vivo and ex vivo upon antigen restimulation. In vitro, IL-17 reduced TARC production in dendritic cells (DCs)—the major source of TARC—and antigen uptake by DCs and IL-5 and IL-13 production in regional lymph nodes. Furthermore, IL-17 is regulated in an IL-4–dependent manner since mice deficient for IL-4Rα signaling showed a marked increase in IL-17 concentration with inhibited eosinophil recruitment. Therefore, endogenous IL-17 is controlled by IL-4 and has a dual role. Although it is essential during antigen sensitization to establish allergic asthma, in sensitized mice IL-17 attenuates the allergic response by inhibiting DCs and chemokine synthesis.