Prostaglandins, a family of lipidic molecules released during inflammation, display immunomodulatory properties in several models. One use includes exposure of monocyte-derived dendritic cells (DCs) to a cocktail of cytokines that contains prostaglandin E-2 (PGE(2)) for purposes of maturation; such cells are currently being used for cancer immunotherapy trials. Our analysis of the transcription profile of DCs matured in the presence of tumor necrosis factor alpha (TNF alpha) and PGE(2) revealed a strong up-regulation of indoleamine 2-3 dioxygenase (IDO), an enzyme involved in tryptophan catabolism and implicated in both maternal and T-cell tolerance. Using quantitative assays to monitor levels of IDO mRNA, protein expression, and enzyme activity, we report that PGE(2) induces mRNA expression of IDO; however, a second signal through TNF receptor (TNF-R) or a Toll-like receptor (TLR) is necessary to activate the enzyme. Interestingly, use of TNF alpha, lipopolysaccharide, or Staphylococcus aureus Cowan I strain (SAC) alone does not induce IDO. The effect of PGE(2) is mediated by activation of adenylate cyclase via the Gs-protein-coupled receptor E prostanoid-2 (EP2). A better understanding of these regulatory mechanisms and the crosstalk between TNF-R/TLR and EP2 signaling pathways will provide insight into the regulation of T-cell activation by DCs and may help to improve existing immunotherapy protocols.