Plasmacytoid dendritic cells (pDCs), the professional producers of type I interferons (IFN-alpha/beta), play a pivotal role in innate and adaptive immune responses against viral infections. Although functional impairment of circulating pDCs in chronic hepatitis B (CHB) patients has been reported previously, the mechanism responsible for these defects remains unclear. We hypothesize that HBsAg circulating in high amounts during HBV infection may interact with pDC and contribute to pDC dysfunction. In support of this hypothesis we show that pDCs treated with HBsAg secreted much less IFN-alpha than control pDCs. Furthermore, suppression is specific for TLR9, with no effects upon TLR7-mediated IFN-alpha secretion. HBsAg inhibited TLR9-mediated IRF-7 expression and nuclear translocation, which are important for induction of IFN-alpha gene transcription. HBsAg upregulated the SOCS-1 expression and bound to BDCA-2 receptors on the plasma membrane of pDCs, resulting in the inhibition of the IFN-alpha production. In conclusion, the above data suggested that HBsAg may directly interfere with the function of pDC through HBsAg-mediated upregulation of SOCS-1 expression and BDCA-2 ligation, which could partially explain how HBV evades the immune system to establish a persistent infection.