Costimulation-deficient dendritic cells (DCs) prevent autoimmune disease in mouse models. However, autoimmune-prone mice and humans fail to control expansion of peripheral autoreactive effector memory T cells (T(EMs)), which resist immunoregulation by costimulation-deficient DCs. In contrast, activation of DC costimulation may be coupled with regulatory capacity. To test whether costimulatory DCs control T(EMs) and attenuate established autoimmune disease, we used RelB-deficient mice, which have multiorgan inflammation, expanded peripheral autoreactive T(EMs), and dysfunctional Foxp3(+) regulatory T cells (Tregs) cells and conventional DCs. T(EMs) were regulated by Foxp3(+) Tregs when costimulated by CD3/CD28-coated beads or wild-type DCs but not DCs deficient in RelB or CD80/CD86. After transfer, RelB and CD80/CD86-sufficient DCs restored tolerance and achieved a long-term cure of autoimmune disease through costimulation of T(EM) and Foxp3(+) Treg IFN-γ production, as well as induction of IDO by host APCs. IDO was required for regulation of T(EMs) and suppression of organ inflammation. Our data challenge the paradigm that costimulation-deficient DCs are required to regulate established autoimmune disease to avoid T(EM) activation and demonstrate cooperative cross-talk between costimulatory DCs, IFN-γ, and IDO-dependent immune regulation. IFN-γ and IDO activity may be good surrogate biomarkers measured against clinical efficacy in trials of autoimmune disease immunoregulation.