Although immune responses are essential to protect the body from infection, they can also harm tissues. Certain tissues and organs, including the eye, constitute specialized microenvironments that locally inhibit immune reactivity. Dedicator of cytokinesis protein 2 (DOCK2) is a Rac-specific guanine nucleotide exchange factor (GEF) that is predominantly found in hematopoietic cells. DOCK2 plays a key role in immune surveillance because it is essential for the activation and migration of leukocytes. DOCK2 mutations cause severe immunodeficiency in humans. We found that DOCK2-mediated Rac activation and leukocyte migration were effectively inhibited by cholesterol sulfate (CS), but not by cholesterol or other sulfated steroids. CS bound to the catalytic domain of DOCK2 and suppressed its GEF activity. Mass spectrometric quantification revealed that CS was most abundantly produced in the Harderian gland, which provides the lipids that form the oily layer of the tear film. Sulfation of cholesterol is mediated by the sulfotransferases SULT2B1b and, to a lesser extent, SULT2B1a, which are produced from the same gene through alternative splicing. By genetically inactivating Sult2b1, we showed that the lack of CS in mice augmented ultraviolet- and antigen-induced ocular surface inflammation, which was suppressed by administration of eye drops containing CS. Thus, CS is a naturally occurring DOCK2 inhibitor and contributes to the generation of the immunosuppressive microenvironment in the eye.