The regulation of the interaction between the immune system and antigens, which may lead to the induction of immune tolerance, is critical both under physiologic conditions and in different pathological settings. In the past few years, major strides have been made in our understanding of the molecular and cellular bases of this process. Novel pathways have been identified and several novel therapeutic agents are currently under clinical investigation for those diseases in which the normal balance between activation and suppression of the immune response is altered. The tryptophan catabolic enzyme, indoleamine 2,3-dioxygenase (IDO), is one of the key players involved in the inhibition of cell proliferation, including that of activated T cells. Recent works have demonstrated a crucial role for IDO in the induction of immune tolerance during infection, pregnancy, transplantation, autoimmunity, and neoplasias, including hematologic malignancies. In this review, the role of IDO in the induction of immunologic tolerance is addressed with a specific focus on its recently discovered effect on hematologic malignancies.