Indoleamine 2,3 dioxygenase (IDO) has emerged as an important mediator of immune tolerance via inhibition of Th1 responses. However, the role of IDO in antigen-induced tolerance or allergic inflammation in the airways that is regulated by Th2 responses has not been elucidated. By using IDO^−/− mice, we found no impairment of airway tolerance, but, surprisingly, absence of IDO provided significant relief from establishment of allergic airways disease, as evident from attenuated Th2 cytokine production, airway inflammation, mucus secretion, airway hyperresponsiveness, and serum ovalbumin-specific IgE. Myeloid dendritic cells isolated from lung-draining lymph nodes of mice immunized for either Th1 or Th2 response revealed fewer mature dendritic cells in the lymph nodes of IDO^−/− mice. However, the net functional impact of IDO deficiency on antigen-induced responses was more remarkable in the Th2 model than in the Th1 model. Collectively, these data suggest that IDO is not required for the induction of immune tolerance in the airways but plays a role in promoting Th2-mediated allergic airway inflammation via unique effects on lung dendritic cells.