Prostaglandins, a family of lipidic molecules released during inflammation, display immunomodulatory properties in several models. One use includes exposure of monocyte-derived dendritic cells (DCs) to a cocktail of cytokines that contains prostaglandin E₂ (PGE₂) for purposes of maturation; such cells are currently being used for cancer immunotherapy trials. Our analysis of the transcription profile of DCs matured in the presence of tumor necrosis factor α (TNFα) and PGE₂ revealed a strong up-regulation of indoleamine 2-3 dioxygenase (IDO), an enzyme involved in tryptophan catabolism and implicated in both maternal and T-cell tolerance. Using quantitative assays to monitor levels of IDO mRNA, protein expression, and enzyme activity, we report that PGE₂ induces mRNA expression of IDO; however, a second signal through TNF receptor (TNF-R) or a Toll-like receptor (TLR) is necessary to activate the enzyme. Interestingly, use of TNFα, lipopolysaccharide, or Staphylococcus aureus Cowan I strain (SAC) alone does not induce IDO. The effect of PGE₂ is mediated by activation of adenylate cyclase via the Gs-protein-coupled receptor E prostanoid-2 (EP2). A better understanding of these regulatory mechanisms and the crosstalk between TNF-R/TLR and EP2 signaling pathways will provide insight into the regulation of T-cell activation by DCs and may help to improve existing immunotherapy protocols.