Plasmacytoid dendritic cells (pDCs) are specialized in rapid and massive secretion of type I interferon (IFN-α/β) in response to foreign nucleic acids. Combined with their antigen presentation capacity, this powerful functionality enables pDCs to orchestrate innate and adaptive immune responses. pDCs combine features of both lymphocytes and classical dendritic cells and display unique molecular adaptations to nucleic acid sensing and IFN production. In the decade since the identification of the pDC as a distinct immune cell type, our understanding of its molecular underpinnings and role in immunity has progressed rapidly. Here we review select aspects of pDC biology including cell fate establishment and plasticity, specific molecular mechanisms of pDC function, and the role of pDCs in T cell responses, antiviral immunity, and autoimmune diseases. Important unresolved questions remain in these areas, promising exciting times in pDC research for years to come.