Indoleamine 2,3-dioxygenase 1 (IDO1) is an immunosuppressive molecule expressed in some subsets of normal and neoplastic cells. Mature human dendritic cells (DCs) have been shown to express IDO1, but little is known about its expression and function during DC differentiation from bone marrow hematopoietic stem/progenitor cells (HSPCs). Here, we show that during in vitro differentiation along the myeloid DC lineage, CD34(+) HSPCs acquire IDO1 expression, which acts in a tolerogenic manner by inducing a population of fully functional CD4(+)CD25(+) FOXP3(+) T-regulatory cells. Phenotypically, CD1a(+)CD14(-) HPSC-derived DCs expressed IDO1, langerin, CD11b, and CD1c. Cell-sorting experiments demonstrated that IDO1 expression is found in a subset of CD1a(+)CD14(-)langerin(+) cells, expressing CD103, which is capable of inducing T-regulatory cells in an IDO1-dependent manner. In conclusion, DC differentiation from CD34(+) HSPCs results in the expression of a functionally active IDO1 protein in CD1a(+)langerin(+), CD103-expressing DCs. These data point toward IDO1 expression as part of a tolerogenic signature during DC development.