Indoleamine 2,3-dioxygenase (IDO), by enzymatic tryptophan degradation, has recently been proposed to have profound immunoregulatory activity. By most recent findings IDO induction follows reverse signaling of cytotoxic T-lymphocyte antigen-4 (CTLA-4) to its ligands CD80/86 and acts as a counter-regulatory mechanism to T-cell stimulation. With regard to transplantation, experimental evidence suggests that IDO has the potential to down-regulate allo-responses of T cells in vitro and to promote tolerance in murine models of pancreatic islet transplantation and of allogeneic T-cell transfer in vivo. However, the physiologic role of IDO in human organ transplantation still is to be elucidated. Experiments that clearly identify a significance of IDO in tolerance induction to vascularized organ allografts or in effecting costimulation blockade are required. In this review we provide a conceptual view of the current knowledge of IDO in the context of transplantation and, in light of its particular biological features, speculate about its potential application in novel therapeutic approaches for tolerance induction.