Influenza infection stimulates protective host immune responses but paradoxically enhances lung indoleamine 2,3 dioxygenase (IDO) activity, an enzyme that suppresses helper/effector T cells and activates Foxp3-lineage regulatory CD4 T cells (Tregs). Influenza A/PR/8/34 (PR8) infection stimulated rapid elevation of IDO activity in lungs and lung-draining mediastinal lymph nodes (msLNs). Mice lacking intact IDO1 genes (IDO1-KO mice) exhibited significantly lower morbidity after sub-lethal PR8 infection, and genetic or pharmacologic IDO ablation led to much faster recovery after virus clearance. More robust influenza-specific effector CD8 T cell responses manifested in lungs of PR8-infected IDO1-KO mice, though virus clearance rates were unaffected by IDO ablation. Similar outcomes manifested in mice infected with a less virulent influenza A strain (X31). IDO induction in X31-infected lungs was dependent on IFN type II (IFNγ) signaling and was restricted to non-hematopoietic cells, while redundant IFN type 1 or type II signaling induced IDO exclusively in hematopoietic cells from msLNs. Memory T cells generated in X31-primed IDO1-KO mice protected mice from subsequent challenge with lethal doses of PR8 (100×LD50). However recall T cell responses were less robust in lung interstitial tissues, and classic dominance of TCR Vβ8.3 chain usage amongst memory CD8+ T cells specific for influenza nucleoprotein (NP366) did not manifest in IDO1-KO mice. Thus, influenza induced IDO activity in lungs enhanced morbidity, slowed recovery, restrained effector T cell responses in lungs and shaped memory T cell repertoire generation, but did not attenuate virus clearance during primary influenza A infection.