Tumors create an abnormal state of tolerance toward themselves and their antigens. One mechanism that might contribute to this tolerance is the immunoregulatory enzyme indoleamine 2,3-dioxygenase (IDO). IDO-expressing antigen-presenting cells are found in tumor-draining lymph nodes, where they can create a tolerogenic microenvironment. IDO can also be expressed within the tumor itself, by tumor cells or host stromal cells, where it can inhibit the effector phase the immune response. Finally, emerging evidence suggests that IDO might also constitute a significant counter-regulatory mechanism, induced by clinically relevant pro-inflammatory signals, such as IFN-γ, IFN-α, CpG oligodeoxynucleotides, and 4-1BB ligation. Strategies to inhibit the IDO pathway may thus assist in breaking tolerance to tumors, and might enhance the efficacy of other immunotherapy strategies by removing unwanted counter-regulation.