Control of tryptophan metabolism by indoleamine 2,3-dioxygenase (IDO) in dendritic cells (DCs) is a highly versatile regulator of innate and adaptive immune responses. In acute reactions, the otherwise inflammatory cytokine interferon γ (IFN-γ) acts in a feedback fashion to induce IDO's enzymatic function--and thus prevent potentially harmful, exaggerated responses--through the combined effects of tryptophan starvation and tryptophan catabolites acting via the aryl hydrocarbon receptor of T cells. IDO, however, is also involved in the maintenance of stable tolerance to self in noninflammatory contexts, thus restraining autoimmunity. Exposure, indeed, of mouse plasmacytoid DCs (pDCs) to transforming growth factor β (TGF-β) provides IDO with regulatory effects that are distinct, in nature, from its enzymic activity. Once phosphorylated, IDO mediates signaling events culminating in self-amplification and maintenance of a stably regulatory condition in pDCs. Therefore, IDO has dual immunoregulatory functions driven by distinct cytokines. Firstly, the IFN-γ-IDO axis is crucial in generating and sustaining the function of regulatory T cells. Secondly, a nonenzymic function of IDO--as a signaling molecule--contributes to TGF-β-driven tolerance. The latter function is part of a regulatory circuit in pDCs whereby--in response to TGF-β--the kinase Fyn mediates tyrosine phosphorylation of IDO-associated immunoreceptor tyrosine-based inhibitory motifs, resulting in downstream effects that regulate gene expression and preside over a proper, homeostatic balance between immunity and tolerance. All these aspects are covered in this review.