CD34(+)-derived dendritic cells (DCs) can be infected by the T cell-tropic HIVLAI strain, but are poorly permissive for efficient virus production. However, HIVLAI-infected DCs are able to transmit a vigorous cytopathic infection to activated CD4(+) T cells. We show that DCs differentiated from CD34(+) cells can be efficiently transduced by a retroviral vector carrying the IFN-beta coding sequence. This results in resistance to infection by HIV as shown by a threefold reduction in the HIV DNA copy number per cell, and by inhibition of HIV transmission from DCs to CD4(+) T cells. Moreover, constitutive IFN-beta production by DCs increases the synthesis of IL-12 and IFN-gamma Th1-type cytokines and of the beta-chemokines MIP-1alpha, MIP-1beta, and RANTES. This indicates that IFN-beta transduction of DCs blocks HIV infection and viral transmission to CD4(+) T cells, and could favor cellular immune responses in HIV-infected patients.