Circulating heat shock protein (HSP)‐27 is associated with tumor progression and increased post‐injury infection. Extracellular HSP‐27 might alter monocyte (MO)‐derived DC and/or MΦ function to mediate immunosuppression. HSP‐27 treatment inhibited expression of CD1a and CD1b/c, antigen uptake, and allogeneic T cell induction (MLR) by IL‐4 + GM‐CSF‐differentiated human DC while increasing some MΦ characteristics (↑CD14, ↑CD16, ↑CD163). MO cytokine receptor profiles elicited by 24‐h exogenous HSP‐27 treatment remained supportive of immature DC (iDC) emergence (↑IL‐4R, ↓IL‐6R, ↓M‐CSFR). IL‐10, IL‐6, and M‐CSF (which promote MΦ differentiation) were significantly increased in IL‐4 + GM‐CSF + HSP‐27 MO→iDC differentiation cultures. However, HSP‐27 treatment during MO differentiation to DC increased programmed cell death ligand 1 coinhibitor and depressed CD86 costimulator expression in parallel to decreased iDC MLR activity. This suggested that increased MΦ differentiation was not solely responsible for HSP‐27 reduction of differentiating DC activity. HSP‐27 treatment actually depressed the phagocytic capacity of MO differentiated to MΦ by IL‐10 or M‐CSF culture. CD163 (hemoglobin receptor) expression was depressed on M‐CSF + HSP‐27 MO‐derived MΦ. HSP‐27‐mediated inhibition of MO→iDC differentiation was reversed by p38α & β inhibitor (SB202190) addition or TLR4 receptor modulation. HSP‐27 impaired appropriate MO→iDC and MO→MΦ differentiation modulating expression of receptors necessary for their proper functions. This suggests that endogenous HSP‐27 has immunoregulatory activities which could contribute to immunopathology.