Indoleamine 2,3-dioxygenase-1 (IDO1; IDO) mediates oxidative cleavage of tryptophan, an amino acid essential for cell proliferation and survival. IDO1 inhibition is proposed to have therapeutic potential in immunodeficiency-associated abnormalities, including cancer. Here, we describe INCB024360, a novel IDO1 inhibitor, and investigate its roles in regulating various immune cells and therapeutic potential as an anticancer agent. In cellular assays, INCB024360 selectively inhibits human IDO1 with IC₅₀ values of approximately 10nM, demonstrating little activity against other related enzymes such as IDO2 or tryptophan 2,3-dioxygenase (TDO). In coculture systems of human allogeneic lymphocytes with dendritic cells (DCs) or tumor cells, INCB024360 inhibition of IDO1 promotes T and natural killer (NK)–cell growth, increases IFN-γ production, and reduces conversion to regulatory T (T_reg)–like cells. IDO1 induction triggers DC apoptosis, whereas INCB024360 reverses this and increases the number of CD86^high DCs, potentially representing a novel mechanism by which IDO1 inhibition activates T cells. Furthermore, IDO1 regulation differs in DCs versus tumor cells. Consistent with its effects in vitro, administration of INCB024360 to tumor-bearing mice significantly inhibits tumor growth in a lymphocyte-dependent manner. Analysis of plasma kynurenine/tryptophan levels in patients with cancer affirms that the IDO pathway is activated in multiple tumor types. Collectively, the data suggest that selective inhibition of IDO1 may represent an attractive cancer therapeutic strategy via up-regulation of cellular immunity.