IFN-α prevents Ag-induced arthritis (AIA), and in this study we investigated the role of IDO1 and TGF-β signaling for this anti-inflammatory property of IFN-α. Arthritis was induced by methylated BSA (mBSA) in mBSA-sensitized wild-type (WT), Ido1, or Ifnar mice, treated or not with IFN-α or the IDO1 product kynurenine (Kyn). Enzymatic IDO1 activity, TGF-β, and plasmacytoid dendritic cells (pDC) were neutralized by 1-methyltryptophan and Abs against TGF-β and pDC, respectively. IDO1 expression was determined by RT-PCR, Western blot, and FACS, and enzymatic activity by HPLC. Proliferation was measured by H-thymidine incorporation and TGF-β by RT-PCR and ELISA. WT but not Ido1 mice were protected from AIA by IFN-α, and Kyn, the main IDO1 product, also prevented AIA, both in WT and Ifnar mice. Protective treatment with IFN-α increased the expression of IDO1 in pDC during AIA, and Ab-mediated depletion of pDC, either during mBSA sensitization or after triggering of arthritis, completely abrogated the protective effect of IFN-α. IFN-α treatment also increased the enzymatic IDO1 activity (Kyn/tryptophan ratio), which in turn activated production of TGF-β. Neutralization of enzymatic IDO1 activity or TGF-β signaling blocked the protective effect of IFN-α against AIA, but only during sensitization and not after triggering of arthritis. Likewise, inhibition of the IDO1 enzymatic activity in the sensitization phase, but not after triggering of arthritis, subdued the IFN-α-induced inhibition of mBSA-induced proliferation. In conclusion, presence of IFN-α at Ag sensitization activates an IDO1/TGF-β-dependent anti-inflammatory program that upon antigenic rechallenge prevents inflammation via pDC.