Indoleamine 2, 3-dioxygenase (IDO) is an intracellular hemeprotein enzyme which catalyses the essential amino acid tryptophan. Accumulating evidence has demonstrated that tryptophan depletion and its toxic metabolites expression in tissue microenvironment can suppress local allogeneic T cell proliferation and activation. Ever since the discovery that IDO was involved in the maintenance of fetal-maternal tolerance, numerous studies have confirmed that IDO is a potent regulator of immune cell function. Importantly, IDO+dendritic cells (DCs) might interact with regulatory T cells (Tregs) to form an immunomodulatory network to promote immune tolerance induction. Moreover, it has been reported that overexpression of IDO in transplanted organs can prolong allograft survival, suggesting a possible peripheral tolerogenic pathway with important implications in transplantation. However, the underlying mechanism for the beneficial effects of IDO in transplantation remains unclear. In this review, we attempt to summarize our current understandings about IDO as a mediator of immunity in transplantation and provide an overview of IDO as a new paradigm in transplantation.