Indoleamine 2,3-dioxygenase (IDO) is the first and rate-limiting enzyme in the kynurenine pathway of tryptophan catabolism and has been implicated in neurotoxicity and suppression of the antiviral T-cell response in HIV encephalitis (HIVE). Here we show that the Toll-like receptor 3 (TLR3) ligand poly(I:C) (PIC) induces the expression of IDO in human astrocytes. PIC was less potent than gamma interferon (IFN-gamma) but more potent than IFN-beta in inducing IDO. PIC induction of IDO was mediated in part by IFN-beta but not IFN-gamma, and both NF-kappaB and interferon regulatory factor 3 (IRF3) were required. PIC also upregulated TLR3, thereby augmenting the primary (IFN-beta) and secondary (IDO and viperin) response genes upon subsequent stimulation with PIC. In HIVE, the transcripts for TLR3, IFN-beta, IDO, and viperin were increased and IDO immunoreactivity was detected in reactive astrocytes as well as macrophages and microglia. PIC caused suppression of intracellular replication of human immunodeficiency virus pseudotyped with vesicular stomatitis virus G protein and human cytomegalovirus in a manner dependent on IRF3 and IDO. The involvement of IDO was demonstrated by partial but significant reversal of the PIC-mediated antiviral effect by IDO RNA interference and/or tryptophan supplementation. Importantly, the cytokine interleukin-1 abolished IFN-gamma-induced IDO enzyme activity in a nitric oxide-dependent manner without suppressing protein expression. Our results demonstrate that IDO is an innate antiviral protein induced by double-stranded RNA and suggest a therapeutic utility for PIC in human viral infections. They also show that IDO activity can be dissociated from protein expression, indicating that the local central nervous system cytokine and nitric oxide environment determines IDO function.