Early life bacterial interactions shape skin immune function. Generation of commensal-specific Tregs is facilitated by neonatal uptake of commensal antigens by Type 2 CD301b+ dendritic cells (CD301b+ DC2s). We asked whether detection of microbe-associated ligands re-enforce tolerogenic function of CD301b+ DC2s, specifically examining the role of toll-like receptor 2 (TLR2) and generation of Tregs to Staphylococcus epidermidis (S. epi). Loss of TLR2 expression by CD301b+ DC2s impeded generation of S. epi-specific Tregs in vitro and in vivo. We generated a Dlgt S. epi mutant lacking membrane-associated lipoproteins that cannot agonize TLR2. In DC-T cell assays, Dlgt S. epi led to diminished antigen-specific Tregs as compared to wild-type S. epi, an outcome replicated via mono-colonization of germ-free mice. CD301b+ DC2 Treg generation is supported by their production of retinoic acid (RA). Notably, CD301b+ DC2 expression of Aldh1a2, encoding the rate-limited enzyme in RA production, was more highly upregulated by uptake of wild-type vs. Dlgt S. epi uptake. Thus, detection of a conserved microbial signal reinforces tolerogenic function among a specialized group of neonatal skin DCs, enhancing long-term tolerance to commensal antigens.