Alpha interferon (IFN-α) is an approved medication for chronic hepatitis B. Gamma interferon (IFN-γ) is a key mediator of host innate and adaptive antiviral immunity against hepatitis B virus (HBV) infection in vivo. In an effort to elucidate the antiviral mechanism of these cytokines, 37 IFN-stimulated genes (ISGs), which are highly inducible in hepatocytes, were tested for their ability to inhibit HBV replication upon overexpression in human hepatoma cells. One ISG candidate, indoleamine 2,3-dioxygenase (IDO), an IFN-γ-induced enzyme catalyzing tryptophan degradation, efficiently reduced the level of intracellular HBV DNA without altering the steady-state level of viral RNA. Furthermore, expression of an enzymatically inactive IDO mutant did not inhibit HBV replication, and tryptophan supplementation in culture completely restored HBV replication in IDO-expressing cells, indicating that the antiviral effect elicited by IDO is mediated by tryptophan deprivation. Interestingly, IDO-mediated tryptophan deprivation preferentially inhibited viral protein translation and genome replication but did not significantly alter global cellular protein synthesis. Finally, tryptophan supplementation was able to completely restore HBV replication in IFN-γ- but not IFN-α-treated cells, which strongly argues that IDO is the primary mediator of IFN-γ-elicited antiviral response against HBV in human hepatocyte-derived cells.