Dendritic cells (DC) are pivotal for T cell-mediated immunity. We investigated the early and terminal maturation of monocyte-derived DC (MoDC) in myelodysplastic syndromes (FAB subtypes refractory anemia (MDS-RA) or refractory anemia with ringed sideroblasts (MDS-RARS)). Immature MoDC were obtained by culture of monocytes with GM-CSF and IL-4 for 8 days. To obtain mature MoDC, TNF-alpha was added during the final three culture days. T cell proliferation and T cell cytokine secretion in mixed lymphocyte reactions (MLR) unveiled a strong reduction of allostimulatory capacity of mature but also of immature MoDC from MDS patients. Immature MoDC from MDS patients exhibited an almost normal immunophenotype, but secreted substantially less IL-12 and more IL-10 in response to LPS/IFN-gamma than normal controls. Terminal addition of TNF-alpha to GM-CSF/IL-4 treated monocytes failed to extinguish cytokine production by MDS MoDC and failed to induce the expected membrane upregulation of costimulatory and other ligands as in normal controls. While our data provide further support for previous studies that have indicated an impaired differentiation of immature towards mature MoDC, they also clearly demonstrate a qualitatively and quantitatively altered cytokine secretion at the level of immature MoDC, which may in part explain the reduced allostimulatory capacity of these cells. These alterations may contribute to immune modulation of the clinical phenotype of marrow failure in MDS, and may have to be considered when designing DC-based immunotherapeutic strategies for MDS.