By mediating tryptophan catabolism, the enzyme indoleamine 2,3-dioxygenase (IDO) has a complex role in immunoregulation in infection, pregnancy, autoimmunity, transplantation, and neoplasia. We hypothesized that IDO might affect the outcome of the infection in mice infected with Candida albicans by virtue of its potent regulatory effects on inflammatory and T cell responses. IDO expression was examined in mice challenged with the fungus along with the consequences of its blockade by in vivo treatment with an enzyme inhibitor. We found that IDO activity was induced at sites of infection as well as in dendritic cells and effector neutrophils via IFN-gamma- and CTLA-4-dependent mechanisms. IDO inhibition greatly exacerbated infection and associated inflammatory pathology as a result of deregulated innate and adaptive/regulatory immune responses. However, a role for tryptophan catabolism was also demonstrated in a fungus-autonomous fashion; its blockade in vitro promoted yeast-to-hyphal transition. These results provide novel mechanistic insights into complex events that, occurring at the fungus/pathogen interface, relate to the dynamics of host adaptation to the fungus. The production of IFN-gamma may be squarely placed at this interface, where IDO activation probably exerts a fine control over fungal morphology as well as inflammatory and adaptive antifungal responses.