A serious impediment to gene and protein replacement therapy in hemophilia A is the development of inhibitors. Mechanisms responsible for inhibitor development include T-cell-dependent adaptive immune responses and the CD28–B7 signaling pathway that eventually leads to the formation of antibodies directed against factor VIII (FVIII). Indoleamine 2, 3-dioxygenase (IDO) is a potent immunosuppressive enzyme that can inhibit T-cell responses and induce T-cell apoptosis by regulation of tryptophan metabolism. Kynurenine, one of the metabolites of tryptophan, has been implicated as an immune modulator. Here we hypothesize that co-delivery of the genes for FVIII and IDO can attenuate inhibitor formation. Using transposon-based gene delivery, we observed long-term therapeutic FVIII expression and significantly reduced inhibitor titers when the genes were co-delivered. Co-expression of FVIII and IDO in the liver was associated with increased plasma kynurenine levels, an inhibition of T-cell infiltration and increased apoptosis of T cells within the liver. These experiments suggest that modulation of tryptophan catabolism through IDO expression provides a novel strategy to reduce inhibitor development in hemophilia gene/protein therapy.