A comprehensive understanding of the complex, autologous cellular interactions and regulatory mechanisms that occur during normal dendritic cell (DC)–stimulated immune responses is critical to optimizing DC-based immunotherapy. We have found that mature, immunogenic human monocyte-derived DCs (moDCs) up-regulate the immune-inhibitory enzyme, indoleamine 2,3-dioxygenase (IDO). Under stringent autologous culture conditions without exogenous cytokines, mature moDCs expand regulatory T cells (Tregs) by an IDO-dependent mechanism. The priming of resting T cells with autologous, IDO-expressing, mature moDCs results in up to 10-fold expansion of CD4⁺CD25^brightFoxp3⁺CD127^neg Tregs. Treg expansion requires moDC contact, CD80/CD86 ligation, and endogenous interleukin-2. Cytofluorographically sorted CD4⁺ CD25^brightFoxp3⁺ Tregs inhibit as much as 80% to 90% of DC-stimulated autologous and allogeneic T-cell proliferation, in a dose-dependent manner at Treg:T-cell ratios of 1:1, 1:5, and as low as 1:25. CD4⁺CD25^brightFoxp3⁺ Tregs also suppress the generation of cytotoxic T lymphocytes specific for the Wilms tumor antigen 1, resulting in more than an 80% decrease in specific target cell lysis. Suppression by Tregs is both contact-dependent and transforming growth factor-β–mediated. Although mature moDCs can generate Tregs by this IDO-dependent mechanism to limit otherwise unrestrained immune responses, inhibition of this counter-regulatory pathway should also prove useful in sustaining responses stimulated by DC-based immunotherapy.