The development of inhibitory antibodies to factor VIII (FVIII) is a major obstacle in using this clotting factor to treat individuals with hemophilia A. Patients with a congenital absence of FVIII do not develop central tolerance to FVIII, and therefore, any control of their FVIII-reactive lymphocytes relies upon peripheral tolerance mechanisms. Indoleamine 2,3-dioxygenase 1 (IDO1) is a key regulatory enzyme that supports Treg function and peripheral tolerance in adult life. Here, we investigated the association between IDO1 competence and inhibitor status by evaluating hemophilia A patients harboring F8-null mutations that were either inhibitor negative (n = 50) or positive (n = 50). We analyzed IDO1 induction, expression, and function for any relationship with inhibitor occurrence by multivariable logistic regression and determined that defective TLR9-mediated activation of IDO1 induction is associated with an inhibitor-positive status. Evaluation of experimental hemophilic mouse models with or without functional IDO1 revealed that tryptophan metabolites, which result from IDO1 activity, prevent generation of anti-FVIII antibodies. Moreover, treatment of hemophilic animals with a TLR9 agonist suppressed FVIII-specific B cells by a mechanism that involves IDO1-dependent induction of Tregs. Together, these findings indicate that strategies aimed at improving IDO1 function should be further explored for preventing or eradicating inhibitors to therapeutically administered FVIII protein.