Immunoglobulin E (IgE) functions as an Fc-receptor-bound antigen sensor for mast cells and basophils, the classical effector cells of allergy. A cell-bound IgE pool is formed when monomeric IgE binds to FcεRI, the high affinity IgE Fc receptor on these cells, and minor amounts of antigen are sufficient to trigger the pro-allergic innate IgE effector axis. Additionally, FcεRI is constitutively expressed on human dendritic cells (DCs), and thus the latter cell type also receives signals via cell-bound IgE. Notably, steady-state expression of FcεRI on DCs is absent in SPF-housed mice. How DCs integrate IgE/FcεRI-derived signals into their sentinel functions as gatekeepers of immunity was therefore only recently studied with transgenic mice that phenocopy human FcεRI expression. In this review, we summarize advances in our understanding of the functions of DC-bound IgE which demonstrate that IgE-mediated activation of DCs in allergic Th2-type inflammation appears to be immune regulatory rather than pro-inflammatory.