Indoleamine 2,3-dioxygenase (IDO) is an enzyme that degrades the essential amino acid tryptophan. The concept that cells expressing IDO can suppress T-cell responses and promote tolerance is a relatively new paradigm in immunology. Considerable evidence now supports this hypothesis, including studies of mammalian pregnancy, tumour resistance, chronic infections and autoimmune diseases. In this review, we summarize key recent developments and propose a unifying model for the role of IDO in tolerance induction.