It has been reported that the impaired cytotoxicity of natural killer (NK) cells and abnormal cytokines that are changed by the interaction between ectopic endometrial cells and immune cells is indispensable for the initiation and development of endometriosis (EMS). However, the mechanism of NK cells dysfunction in EMS remains largely unclear. Here, we found that NK cells in peritoneal fluid from women with EMS highly expressed indoleamine 2,3-dioxygenase (IDO). Furthermore, IDO+NK cells possessed lower NKp46 and NKG2D but higher IL-10 than that of IDO-NK. Co-culture with endometrial stromal cells (nESCs) from healthy control or ectopic ESCs (eESCs) from women with EMS led to a significant increase in the IDO level in NK cells from peripheral blood, particularly eESCs, and an anti-TGF-β neutralizing antibody suppressed these effects in vitro. NK cells co-cultured with ESC more preferentially inhibited the viability of nESCs than eESCs did, and pretreating with 1-methyl-tryptophan (1-MT), an IDO inhibitor, reversed the inhibitory effect of NK cells on eESC viability. These data suggest that ESCs induce IDO+NK cells differentiation partly by TGF-β, and that IDO further restricts the cytotoxicity of NK cells in response to eESCs, which provides a potential therapeutic strategy for EMS patients, particularly those with a high number of impaired cytotoxic IDO+NK cells.