The extrahepatic enzyme indoleamine 2,3-dioxygenase (IDO) catalyzes tryptophan degradation in the first and rate-limiting step towards biosynthesis of the central metabolic co-factor nicotinamide adenine dinucleotide (NAD). While this pathway has been known for decades, the actual physiological role for IDO in mammals remained obscure, because (i.) most cell types do not express the downstream enzymes in the NAD biosynthesis pathway and (ii.) mammals salvage rather than synthesize NAD to meet their metabolic needs. An immunological role for IDO was hinted at with the observation that IDO expression is stimulated by interferon- ? and subsequently confirmed by the discovery of its physiological importance in protecting the fetus from maternal immunity. Similarly, elevations in tryptophan catabolism in cancer patients were known since the 1950s, but the basis and meaning of this phenomenon were uncertain until it was shown that IDO, which is commonly elevated in tumors and draining lymph nodes, suppresses T cell immunity in the tumor microenvironment. Indeed, by creating peripheral tolerance to tumor antigens, IDO can undermine immune responses that thwart tumor cell survival in the context of an underlying inflammatory environment that facilitates tumor outgrowth. In preclinical studies, small molecule inhibitors of IDO compromise this mechanism of immunosuppression and strongly leverage the efficacy of a variety of classical chemotherapeutic agents, supporting the clinical development of IDO inhibitors as a therapeutic goal. This essay summarizes key findings that implicate IDO as an important mediator of peripheral tolerance and discusses the development of anti-cancer modalities that incorporate the use of IDO inhibitors.