Regulation of adaptive immune responses is critically important to allow the adaptive immune system to eradicate infections while causing minimal collateral damage to infected tissues, as well as preventing autoimmune disease mediated by self-reactive lymphocytes. Tumors and pathogens that cause persistent infections can subvert immunoregulatory processes to protect themselves from destruction by T cells, to the detriment of patients. A growing body of evidence supports the hypothesis that specialized subsets of dendritic cells expressing indoleamine 2,3 dioxygenase (IDO), which catalyzes oxidative catabolism of tryptophan, play critical roles in regulation of T cell-mediated immune responses. IDO-dependent T cell suppression by dendritic cells suggests that biochemical changes due to tryptophan catabolism have profound effects on T cell proliferation, differentiation, effector functions, and viability. This has critical implications for immunotherapeutic manipulations designed for patients with cancer and chronic infectious diseases. In this review, I focus on dendritic cells that can express IDO, and which acquire potent T cell regulatory functions as a consequence.