Epidemiological evidence points to the inverse relationship between microbial exposure and the prevalence of allergic asthma and autoimmune diseases in Westernized countries. The molecular basis for this observation has not yet been completely delineated. Here we report that the administration of certain toll-like receptor (TLR) ligands, via the activation of innate immunity, induces high levels of indoleamine 2,3-dioxygenase (IDO), the rate-limiting enzyme of tryptophan catabolism in various organs. TLR9 ligand–induced pulmonary IDO activity inhibits Th2-driven experimental asthma. IDO activity expressed by resident lung cells rather than by pulmonary DCs suppressed lung inflammation and airway hyperreactivity. Our results provide a mechanistic insight into the various formulations of the hygiene hypothesis and underscore the notion that activation of innate immunity can inhibit adaptive Th cell responses.