Although monocytes were originally described as precursors to all the different subpopulations of macrophages found in the steady state and formed under inflammatory and infectious conditions, recent data have demonstrated conclusively that monocytes can also differentiate into dendritic cells (DCs). Monocytes are the precursors to different subsets of DCs, such as Langerhans cells and DCs found in the lamina propria of the gastrointestinal, respiratory, and urogenital tracts. In addition, monocyte-derived DCs (moDCs), newly formed during inflammatory reactions, appear to fulfill an essential role in defense mechanisms against pathogens by participating in the induction of both adaptive and innate immune responses. In this regard, moDCs have the capacity to activate antigen-specific CD4(+) T-cell responses and to cross-prime CD8(+) T cells, during viral, bacterial, and parasitic infections. In addition, monocytes have been recently described as the precursors to a subset of DCs specialized in innate immunity against pathogens, named TipDCs [for TNF-alpha (tumor necrosis factor-alpha)-iNOS (inducible nitric oxide synthase)-producing DCs] that display a remarkable microbicidal activity and also provide iNOS-dependent help for antibody production by B cells. Importantly, in contrast to DCs developing in the steady state, moDCs formed during inflammatory and infectious processes are subjected to diverse soluble mediators that determine the multiple functional specificities displayed by moDCs, as a result of the remarkable developmental plasticity of monocytes. In this review, we discuss recent findings dealing with the differentiation and functional relevance of moDCs that have widened the frontiers of DC immunobiology in relation to innate and adaptive immunity and the etiology of chronic inflammatory diseases.