Plasmacytoid dendritic cells (PDC) represent a distinct immune cell type specialized in direct virus recognition and rapid secretion of type I interferon. The origin and lineage affiliation of PDC have been controversial, partly because PDC show features of both lymphocytes and dendritic cells (DC). Recent studies helped elucidate the cellular and molecular basis of PDC development. In particular, the common developmental origin and genetic similarity of PDC and classical antigen-presenting DC have been established. In addition, E protein transcription factor E2-2 was shown to control lineage commitment and gene expression program of PDC. Because E proteins are essential regulators of lymphocyte development, E2-2 activity may underlie the distinct ‘lymphoid’ features of PDC.