PURPOSE: In this study, we quantify Pigment Epithelium-derived Factor (PEDF) secreted by corneal epithelial cells and evaluate its immunomodulatory functions in a murine model of dry eye disease (DED). METHODS: We induced DED in female C57BL/6 mice using a controlled environment chamber for 14 days. We quantified mRNA expression of Serpinf1 gene and PEDF protein synthesis by corneal epithelial cells (CEpCs) using RT-PCR and ELISA. CEpCs from normal or DED mice were cultured with IFNγ-stimulated-dendritic cells (DCs) for 24 h, and expression of MHC-II and CD86 by DCs was determined using flow cytometry. Next, we either added recombinant PEDF (rPEDF) or anti-PEDF antibody to co-culture, and DC expression of the above maturation markers was quantified. Lastly, we treated DED mice with either topical rPEDF, anti-PEDF Ab or murine serum albumin (MSA), and DC maturation, expression of pro-inflammatory cytokines, and DED severity were investigated. RESULTS: Serpinf1 mRNA expression and PEDF protein production levels by CEpCs were upregulated in DED. CEpCs from DED mice exhibited an enhanced suppressive effect on the expression of MHC-II and CD86 by DCs, compared to normal mice. This effect was abolished by blocking endogenous PEDF with anti-PEDF Ab or enhanced by supplementing with rPEDF. Treatment with anti-PEDF antibody blocked the effect of endogenous-PEDF and increased DC maturation, expression of pro-inflammatory cytokines in conjunctivae, and exacerbated disease severity in DED mice. Conversely, topical rPEDF enhanced the suppressive effect of endogenous PEDF on DC maturation, decreased expression of pro-inflammatory cytokines in conjunctivae, and reduced disease severity. CONCLUSIONS: The results from our study elucidate the role of PEDF in impeding DC maturation, and suppression of ocular surface inflammation, explicating a promising therapeutic potential of PEDF in limiting the corneal epitheliopathy as a consequence of DED.