Persistent viral infections are simultaneously associated with chronic inflammation and highly potent immunosuppressive programs mediated by IL-10 and PDL1 that attenuate antiviral T cell responses. Inhibiting these suppressive signals enhances T cell function to control persistent infection; yet, the underlying signals and mechanisms that program immunosuppressive cell fates and functions are not well understood. Herein, we use lymphocytic choriomeningitis virus infection (LCMV) to demonstrate that the induction and functional programming of immunosuppressive dendritic cells (DCs) during viral persistence are separable mechanisms programmed by factors primarily considered pro-inflammatory. IFNγ first induces the de novo development of naive monocytes into DCs with immunosuppressive potential. Type I interferon (IFN-I) then directly targets these newly generated DCs to program their potent T cell immunosuppressive functions while simultaneously inhibiting conventional DCs with T cell stimulating capacity. These mechanisms of monocyte conversion are constant throughout persistent infection, establishing a system to continuously interpret and shape the immunologic environment. MyD88 signaling was required for the differentiation of suppressive DCs, whereas inhibition of stimulatory DCs was dependent on MAVS signaling, demonstrating a bifurcation in the pathogen recognition pathways that promote distinct elements of IFN-I mediated immunosuppression. Further, a similar suppressive DC origin and differentiation was also observed in Mycobacterium tuberculosis infection, HIV infection and cancer. Ultimately, targeting the underlying mechanisms that induce immunosuppression could simultaneously prevent multiple suppressive signals to further restore T cell function and control persistent infections.