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Abstract Background Tumor-specific cytotoxic T cells and infiltrating lymphocytes are frequently found in tumor tissues in patients with nasopharyngeal carcinoma (NPC). Most patients with NPC, however, especially those with advanced stages, have a poor clinical prognosis despite conventional immunotherapy. The aim of this work was to examine the effect of indoleamine 2,3-dioxygenase (IDO), an immunosuppressive enzyme, on the lymphocyte function in NPC. Methods The NPC cell line CNE2 was treated by interferon-γ (IFNγ) and the levels of IDO expression was analyzed by Western blotting and reverse phase high-performance liquid chromatography (HPLC). Lymphocytes from health human exposed to the milieu created by IDO-positive CNE2 cells and the lymphocyte cytotoxicity to target tumor cells was analyzed by standard lactate dehydrogenase (LDH) release assay. Additionally, expression of IDO was determined by Immunohistochemical assay in the tumor tissues form clinically evaluated NPC. Results IDO expression was acutely induced in the NPC cell line CNE2 by low dose interferon-γ (IFNγ) or by co-incubation with activated lymphocytes. Exposure to the milieu created by IDO-positive CNE2 cells did not promote lymphocyte death, but lymphocyte cytotoxicity against target tumor cells was impaired. The suppression of lymphocyte cytotoxic function was fully restored when the conditioned medium was replaced by fresh medium for 24 h. In additionally, the IDO-positive cells were found scattered in the tumor tissues from patients with NPC. Conclusion Altogether, these findings suggest that IDO-mediated immunosuppression may be involved in the tumor immune evasion, and that blocking IDO activity in tumor cells may help to re-establish an effective anti-tumor T cell response in NPC.