Previous studies have demonstrated that allogeneic liver transplantation induces spontaneous tolerance in mice without requirement for immunosuppression. The underling mechanisms still remain unclear. Our recent studies indicated that Foxp3+CD25+CD4+ regulatory T (Treg) cells play an important role in the induction of liver spontaneous transplant tolerance. How Treg are induced and their functional mechanisms in the regulation of liver transplant tolerance remain undefined. Methods: In this study, we employed mouse spontaneous liver transplantation model, PD-L1−/−, and Flt3L−/− mice to critically examine the role of liver dendritic cells (DCs) and the PD-L1 signal in Treg induction and liver transplant tolerance. Results: liver DCs, which expressed a high number of PD-L1 molecules, induced more Foxp3+CD25+CD4+ Treg in vitro in coculture with allogeneic CD4 T cells compared to spleen DCs. After 5-7 days culture at 1:4 ratio of DC:CD4 T cells, approximately 50% of CD4 T cells expressed CD25 and Foxp3 compared to 25% in the spleen DC cocultured group. However, DCs from PD-L1 deficient mice failed to expand Foxp3+CD25+CD4+ Treg in vitro. Adoptive transfer of Foxp3+CD25+CD4+ Treg expanded from liver DCs prolonged heart allograft survival significantly than in the SCs controls. Moreover, the liver grafts from Flt3L−/− and PD-L1−/− mice were rejected acutely in the C3H recipients. MST were 6.3±2.3 days and 6.25±1.0 days, respectively, P< 0.001, vs 55±33 in WT controls. Immunohistochemistry staining revealed that Foxp3+ cells were reduced, but IL-2, IL-10, and IFN-γ producing cells were significantly increased in the liver grafts and recipient spleens of Flt3L−/− and PD-L1−/− donors. Conclusions: liver DCs play a critical role in the induction of Foxp3+CD25+CD4+ Treg, which underpin spontaneous acceptance of MHC-mismatched liver allografts in mice. The function of DCs on Foxp3+CD25+CD4+ Treg induction and expansion appears to depend on the PD-L1 signal.