Suppression of an excessive systemic inflammatory response is a promising and potent strategy for treating endotoxic sepsis. Indoleamine 2,3-dioxygenase (IDO), which is the rate-limiting enzyme for tryptophan catabolism, may play a critical role in various inflammatory disorders. In this study, we report a critical role for IDO in the dysregulated immune response associated with endotoxin shock. We found that IDO knockout (IDO(-/-)) mice and 1-methyl-D-tryptophan-treated, endotoxin-shocked mice had decreased levels of the cytokines, TNF-alpha, IL-6, and IL-12, and enhanced levels of IL-10. Blockade of IDO is thought to promote host survival in LPS-induced endotoxin shock, yet little is known about the molecular mechanisms that regulate IDO expression during endotoxin shock. In vitro and in vivo, IDO expression was increased by exogenous IL-12, but decreased by exogenous IL-10 in dendritic cells and splenic dendritic cells. Interestingly, whereas LPS-induced IL-12 levels in serum were higher than those of IL-10, the balance between serum IL-12 and IL-10 following challenge became reversed in IDO(-/-)- or 1-methyl-D-tryptophan-treated mice. Our findings demonstrate that the detrimental immune response to endotoxin shock may occur via IDO modulation. Restoring the IL-12 and IL-10 balance by blocking IDO represents a potential strategy for sepsis treatment.