Removal of dead cells in the absence of concomitant immune stimulation is essential for tissue homeostasis. We recently identified an injury-induced protein misfolding event that orchestrates the plasmin-dependent proteolytic degradation of necrotic cells. As impaired clearance of dead cells by the innate immune system predisposes to autoimmunity, we determined whether plasmin could influence endocytosis and immune cell stimulation by dendritic cells – a critical cell that links the innate and adaptive immune systems. We find that plasmin generated on the surface of necrotic cells enhances their phagocytic removal by human monocyte-derived dendritic cells. Plasmin also promoted phagocytosis of protease-resistant microparticles by diverse mouse dendritic cell sub-types both in vitro and in vivo. Together with an increased phagocytic capacity, plasmin-treated dendritic cells maintain an immature phenotype, exhibit reduced migration to lymph nodes, increase their expression/release of the immunosuppressive cytokine TGF-β, and lose their capacity to mount an allogeneic response. Collectively, our findings support a novel role for plasmin formed on dead cells and other phagocytic targets in maintaining tissue homeostasis by increasing the phagocytic function of dendritic cells while simultaneously decreasing their immunostimulatory capacity consistent with producing an immunosuppressive state.