Dendritic cells (DC), belonging to the innate immune system, are specialized for antigen processing and presentation and orchestrate the adaptive immune response to infection. Among different DC populations, plasmacytoid DCs (pDCs) are highly potent type I IFN (IFN-I) producing cells during infection relative to cDCs. Aberrant secretion of IFN-I by pDCs in the absence of infection has been implicated in autoimmune diseases, including systemic lupus erythematosus (SLE) and psoriasis. However, signals dictating pDC generation and activity remain incompletely understood. DC development was done using coculture of common lymphoid progenitors (CLPs) or common dendritic cell progenitors (CDPs) with AC6 stromal cell line in the presence of Flt3 ligand (FL). We were able to derive pDC and cDC in vitro. Here, we report a synergistic role for FL and IFN-I in pDC development from CLPs. Both cDCs and pDC were generated from CLP in response to FL, but pDC generation required higher signal strength of Flt3 receptor and depended on concurrent IFN-I signaling. While CLPs predominantly generated cDCs at low dose of FL, pDCs preferentially developed at higher cytokine doses. Absence of IFN-I receptor 1 (IFNAR1) or mutation of its effector transcription factors STAT1 or STAT2 reduced pDC development in vivo and impaired FL-dependent pDC formation from CLPs in vitro and in vivo. Moreover, exogenous IFN-I enhanced FL-induced pDC genesis, and neutralizing antibody to IFNAR1 abrogated this process. Interestingly, IFN-I was induced in CLPs in response to FL stimulation, facilitating up-regulation of Flt3 expression on CLPs and their differentiation into pDCs. Collectively, these data define a cooperative effect of FL and IFN-I in pDC differentiation from CLPs through an autocrine positive feedback loop that could provide a therapeutic target for treatment of autoimmune disease.