C57BL/6 mice are known to be resistant to the development of collagen-induced arthritis (CIA). However, they show a severe arthritic phenotype when the Ifng gene is deleted. Although it has been proposed that IFN-γ suppresses inflammation in CIA via suppressing Th17 which is involved in the pathogenesis of CIA, the exact molecular mechanism of the Th17 regulation by IFN-γ is poorly understood. This study was conducted to 1) clarify that arthritogenic condition of IFN-γ knockout (KO) mice is dependent on the disinhibition of Th17 and 2) demonstrate that IFN-γ-induced indoleamine-2,3-dioxgenase (IDO) is engaged in the regulation of Th17. The results showed that the IFN-γ KO mice displayed increased levels of IL-17 producing T cells and the exacerbation of arthritis. Also, production of IL-17 by the splenocytes of the IFN-γ KO mice was increased when cultured with type II collagen. When Il17 was deleted from the IFN-γ KO mice, only mild arthritis developed without any progression of the arthritis score. The proportion of CD44(high)CD62L(low) memory-like T cells were elevated in the spleen, draining lymph node and mesenteric lymph node of IFN-γ KO CIA mice. Meanwhile, CD44(low)CD62L(high) naïve T cells were increased in IFN-γ and IL-17 double KO CIA mice. When Th17 polarized CD4+ T cells of IFN-γ KO mice were co-cultured with their own antigen presenting cells (APCs), a greater increase in IL-17 production was observed than in co-culture of the cells from wild type mice. In contrast, when APCs from IFN-γ KO mice were pretreated with IFN-γ, there was a significant reduction in IL-17 in the co-culture system. Of note, pretreatment of 1-methyl-DL- tryptophan, a specific inhibitor of IDO, abolished the inhibitory effects of IFN-γ. Given that IFN-γ is a potent inducer of IDO in APCs, these results suggest that IDO is involved in the regulation of IL-17 by IFN-γ.