(A) In tumor-draining lymph nodes, IDO-expressing DCs directly suppress and anergize tumor-reactive effector T cells responding to antigens presented by IDO⁺ DCs. Also, through bystander suppression, IDO can inhibit T cell responses to antigens presented by neighboring APCs. One mechanism that can induce IDO expression in DCs is reverse signaling mediated by B7-1 or B7-2 molecules expressed on DCs binding to CTLA4 expressed on Tregs. Reciprocally, IDO expression by DCs can also activate Tregs and drive the differentiation of new Tregs from uncommitted CD4⁺ T cells. (B) In the tumor microenvironment, tumor cells can either express IDO constitutively or upregulate IDO in response to inflammatory signals generated by activated effector T cells. IDO expression by tumor cells inhibits effector T cells and also activates Tregs to further contribute to the suppressive microenvironment within the tumor.