Tolerogenic dendritic cells are crucial to control development of autoreactive T cell responses and prevention of autoimmunity. We have reported that NOD.CD11cStat5b-CA transgenic mice expressing a constitutively active form of Stat5b under the control of CD11c promoter are protected from diabetes and that Stat5b-CA-expressing DCs are tolerogenic and halt ongoing diabetes in NOD mice. However, the molecular mechanisms by which Stat5b-CA modulates DC tolerogenic function is not fully understood. Here, we used bone marrow-derived DCs from NOD.CD11cStat5b-CA transgenic mice (Stat5b-CA.BMDC) and found that Stat5b-CA.BMDC displayed high levels of MHC class II, CD80, CD86, PD-L1 and PD-L2 and produced elevated amounts of TGFβ but low amounts of TNF and IL-23. Stat5b-CA.BMDCs upregulated Irf4 and downregulated Irf8 genes and protein expression and promoted CD11c+CD11b+ DC2 subset differentiation. Interestingly, we found that the histone methyltransferase Ezh2 interacted with Stat5b-CA complex that bound GAS sequences in the Irf8 enhancer whereas Ezh2 did not interact with GAS sequences in the case of the Irf4 promoter. Injection of Stat5b-CA.BMDCs to prediabetic NOD mice halted progression of islet inflammation and protected against diabetes. Importantly, inhibition of Ezh2 in tolerogenic Stat5b-CA.BMDCs reduced their ability to prevent diabetes development in NOD recipient mice. Taken together, our data suggest that the active form of Stat5b induces tolerogenic DC function by modulating IRF4 and IRF8 expression through recruitment of Ezh2 and highlight the fundamental role of Ezh2 in Stat5b-mediated induction of tolerogenic DCs function.