Chronic transplant dysfunction (CTD) is the primary cause of late allograft loss in kidney transplantation. Indoleamine 2,3-dioxygenase (IDO) is involved in fetomaternal tolerance and IDO gene therapy inhibits acute rejection following kidney transplantation. The aim of this study is to investigate whether gene therapy with IDO is able to attenuate CTD. Transplantation was performed in a rat Dark-Agouti to Wistar-Furth CTD model. Donor kidneys were incubated either with an adenovirus carrying IDO gene, a control adenovirus or saline. During the first 10 days recipients received low-dose cyclosporine. Body weight, blood pressure, serum creatinine and proteinuria were measured every 2 weeks. Rats were killed after 12 weeks. IDO had a striking beneficial effect on transplant vasculopathy at week 12. It also significantly improved body weight gain; it reduced blood pressure and decreased proteinuria during the follow-up. However, it did not affect the kidney function. In addition, IDO therapy significantly decreased the number of graft-infiltrating macrophages at week 12. The messenger RNA levels of forkhead box p3 and transforming grow factor-β were elevated in the IDO treated group at week 12. Here we show for first time a clear beneficial effect of local IDO gene therapy especially on transplant vasculopathy in a rat model of renal CTD.