Dogs are fascinating creatures, and since they can't exactly convey messages to us using spoken language, we often have to rely on their body language signals. Similarly to cats, a dog's tail can express a lot of different emotions, from anxiety to relaxation. Doggie tails are rather sophisticated communicators.
Relaxation
If your dog's tail is dangling down in a loose manner, it actually may be in its default position, as long as its not hidden between the back legs. When a dog is feeling calm, cool, relaxed and content, he may keep his tail down next to his hind legs and lower thigh area. This type of tail body language indicates that all is fine in your pooch's world. No need to be alarmed here, so don't worry.
Nervousness
When a dog keeps his tail down and concealed between his back legs, it often is a sign that something is amiss. This example of body language usually denotes a canine who is feeling unsure of himself, and rather anxious, vulnerable, weak and submissive, and defensive. He probably also feels frightened and intimidated by whatever individual he perceives to be stronger and superior to him -- the dominant party.
Shyness
A dog may keep his tail down as an expression of pure shyness and timidity, nothing more, nothing less. If a dog feels meek and wants to blend into the background, not only will he keep his tail down, he also may avoid eye contact, periodically flip out his tongue and keep his ears pushed back.
Physical Malaise
If you notice that a dog's tail is lowered, but not pushed in between his rear legs, he may be expressing some sort of physical malaise. Whether he's suffering from a bellyache or an injury somewhere on his body, this dog is not at the top of his game for the moment. Seek veterinary attention for the poor pup if you have reason to think the tail positioning may be medically related.
Defensiveness
A lowered tail also sometimes is a sign of a scared canine in serious defense mode, so watch out. Although this dog is indeed frightened, he also is fully prepared to protect himself, thank you very much. Be on the lookout for other indications of defensiveness, such as shivering of the tail, growling, rigid looking ears and exposed teeth. Be very cautious when in the presence of a dog who is feeling this way. Leave him alone and let him cool off.