Tolerogenic dendritic cells (tol-DCs) offer a promising therapeutic potential for autoimmune diseases. Tol-DCs have been reported to inhibit immunogenic responses, yet little is known about the mechanisms controlling their tolerogenic status, as well as associated specific markers. Here we show that the anti-inflammatory TAM receptor tyrosine kinase MERTK, is highly expressed on clinical grade dexamethasone-induced human tol-DCs and mediates their tolerogenic effect. Neutralization of MERTK in allogenic mixed lymphocyte reactions as well as autologous DC-T cell cultures leads to increased T cell proliferation and IFN-g production. Additionally, we identify a previously unrecognized non-cell autonomous regulatory function of MERTK expressed on DCs. Recombinant Mer-Fc protein, used to mimic MERTK on DCs, suppresses nave and antigen-specific memory T cell activation. This mechanism is mediated by the neutralization of the MERTK agonist Protein S (PROS1) expressed by T cells. We find that MERTK and PROS1 are expressed in human T cells upon TCR activation and drive an autocrine pro-proliferative mechanism. Collectively, these results suggest that MERTK on tol-DCs directly inhibits T cell activation through the competition for PROS1 interaction with MERTK in the T cells. Targeting MERTK may provide an interesting approach to effectively increase or suppress tolerance for the purpose of immunotherapy.