The respiratory tract is a major mucosal site for microorganism entry into the body, and type I interferon (IFN) and dendritic cells constitute a first line of defense against viral infections. We have analyzed the interaction between a model DNA virus, plasmacytoid dendritic cells, and type I IFN during lung infection of mice. Our data show that murine gammaherpesvirus 68 (γHV68) inhibits type I IFN secretion by dendritic cells and that plasmacytoid dendritic cells are necessary for conventional dendritic cell maturation in response to γHV68. Following γHV68 intranasal inoculation, the local and systemic IFN-α/β response is below detectable levels, and plasmacytoid dendritic cells are activated and recruited into the lung with a tissue distribution that differs from that of conventional dendritic cells. Our results suggest that plasmacytoid dendritic cells and type I IFN have important but independent roles during the early response to a respiratory γHV68 infection. γHV68 infection inhibits type I IFN production by dendritic cells and is a poor inducer of IFN-α/β in vivo, which may serve as an immune evasion strategy.