Plasmacytoid dendritic cells (pDCs) are a unique sentinel cell type that can detect pathogen-derived nucleic acids and respond with rapid and massive production of type I interferon. This review summarizes our current understanding of pDC biology, including transcriptional regulation, heterogeneity, role in antiviral immune responses, and involvement in immune pathology, particularly in autoimmune diseases, immunodeficiency, and cancer. We also highlight the remaining gaps in our knowledge and important questions for the field, such as the molecular basis of unique interferon-producing capacity of pDCs. A better understanding of cell type-specific positive and negative control of pDC function should pave the way for translational applications focused on this immune cell type.