Cylindromatosis gene (CYLD) is a ubiquitously expressed deubiquitinating enzyme, which interacts with members of the NF-κB signaling pathway and attenuates NF-κB and JNK signaling. Here, we report that DC derived from transgenic mice, which solely express a naturally occurring CYLD isoform (CYLD(ex7/8)), display a higher content of nuclear RelB and express elevated levels of NF-κB family members as well as of known NF-κB-target genes comprising costimulatory molecules and pro-inflammatory cytokines, as compared with WT DC. Accordingly, unstimulated CYLD(ex7/8) DC exhibited a significantly higher primary allogenic T-cell stimulatory capacity than WT DC and exerted no tolerogenic activity. Transduction of unstimulated CYLD(ex7/8) DC with relB-specific shRNA reduced their T-cell stimulatory capacity. Treatment with the synthetic glucocorticoid dexamethasone known to inhibit NF-κB and AP-1 activity reverted the pro-immunogenic phenotype and function of CYLD(ex7/8) DC and re-established their tolerogenic function. DC derived from CYLD knockout mice showed no functional alterations compared with WT DC. Therefore, although complete loss of CYLD may be compensated for by other endogenous NF-κB inhibitors, CYLD(ex7/8) acts in a dominant negative manner. Our findings raise the question of whether genetic defects associated with increased NF-κB activity may result in disturbed maintenance of peripheral tolerance.