Foxp3+ regulatory T (Treg) cells contribute to the local dysfunctional immune environment in endometriosis, an estrogen-dependent gynecological disease, which affects the function of ectopic endometrial tissue clearance by the immune system. The reason for the high percentage of peritoneal Treg in endometriosis patients is unknown. Here, we show that the proportion of peritoneal Treg cells increases as endometriosis progresses. To determine the probable mechanism, we established a naive T cell-macrophage-endometrial stromal cell (ESC) co-culture system to mimic the peritoneal cavity microenvironment. After adding 1-methyl-tryptophan (1-MT), a specific inhibitor of indoleamine 2,3-dioxygenase-1 (IDO1), to the co-culture system, we found that the differentiation of Treg cells, mainly IL-10+ Treg cells, decreased. Therefore, 1-MT-pretreated ESCs-educated Treg cells performed impaired suppressive function. Moreover, estrogen promoted the differentiation of Treg cells by elevating IDO1 expression in the ectopic lesion. Subsequently, we examined mannose receptor C, type 2 (MRC2), which is an up-stream molecule of IL-10, by bioinformatics analysis and real-time PCR validation. MRC2 expression in ectopic ESCs was notably lower than that in normal ESCs, which further negatively regulated the expression of IDO1 and Ki-67 in ESCs. Furthermore, MRC2 is required for Treg differentiation in the ectopic lesion, especially that for CD4high Treg. Therefore, MRC2-silenced ESCs-educated Treg manifested a stronger suppressive function in vitro. Consistently, the percentage of Treg increased when MRC2-shRNA was administered in the peritoneal cavity of endometriosis-disease mice model. Besides, 1-MT improved the condition of endometriosis, in terms of reducing the number and weight of total ectopic lesions in vivo. These results indicate that the estrogen-IDO1-MRC2 axis participates in the differentiation and function of Treg and is involved in the development of endometriosis. Thus, blockage of IDO1 in the ectopic lesion, which does not influence physiological functions of estrogen, may be considered a potential therapy for endometriosis.