CD40 has emerged as a key signaling pathway for the function of B cells, monocytes, and dendritic cells (DC) in the immune system, and plays a major role in inflammatory pathways of nonhemopoletic cells. CD40 is expressed by monocytes and DC and is up-regulated when DC migrate from the periphery to draining lymph nodes (DLN) in response to microbial challenge. CD154 signaling by MHC-restricted, activated CD4* T cells induces differentiation of DC, as defined by an increased surface expression of MHC, costimulatory, and adhesion molecules. Thus, CD40 functions in the adaptive immune response as a trigger for the expression of costimulatory molecules for efficient T-cell activation. CD40 ligation of DC also has the capacity to induce high levels of the cytokine IL-12, which polarizes CD4(+) T cells toward a T helper 1 (Th1) type, enhances proliferation of CD8(+) T cells, and activates NK cells. CD40 may also play an important role in the decision between tolerance and immunity and the generation of regulatory CD4(+) T cells that are thought to maintain peripheral self-tolerance in vivo.