The immunoregulatory enzyme indoleamine 2,3-dioxygenase (IDO) is expressed by a subset of murine plasmacytoid DCs (pDCs) in tumor-draining lymph nodes (TDLNs), where it can potently activate Foxp3+ regulatory T cells (Tregs). We now show that IDO functions as a molecular switch in TDLNs, maintaining Tregs in their normal suppressive phenotype when IDO was active, but allowing inflammation-induced conversion of Tregs to a polyfunctional T-helper phenotype similar to proinflammatory T-helper-17 (TH17) cells when IDO was blocked. In vitro, conversion of Tregs to the TH17-like phenotype was driven by antigen-activated effector T cells and required interleukin-6 (IL-6) produced by activated pDCs. IDO regulated this conversion by dominantly suppressing production of IL-6 in pDCs, in a GCN2-kinase dependent fashion. In vivo, using a model of established B16 melanoma, the combination of an IDO-inhibitor drug plus antitumor vaccine caused up-regulation of IL-6 in pDCs and in situ conversion of a majority of Tregs to the TH17 phenotype, with marked enhancement of CD8+ T-cell activation and antitumor efficacy. Thus, Tregs in TDLNs can be actively reprogrammed in situ into T-helper cells, without the need for physical depletion, and IDO serves as a key regulator of this critical conversion.