Epstein-Barr virus (EBV)-encoded latent membrane protein 1 (LMP1), which mimics a constitutively active receptor, is required for viral transformation of primary B cells. LMP1 is expressed in EBV-infected germinal center (GC) B cells of immunocompetent individuals, suggesting that it may contribute to persistent EBV infection. In this study, we generated and analyzed mice that expressed LMP1 under the control of the CD19 or activation-induced cytidine deaminase (AID) promoter. Expression of LMP1 induced activation of B cells but severely inhibited their differentiation into antibody-secreting cells (ASCs) in vitro and GC B cells in vivo. LMP1-expressing (LMP1+) B cells not only suppressed the functions of wild-type (WT) B cells in in vitro co-culture, but also blocked differentiation of WT B cells into GC B cells and ASCs in immunized bone marrow chimeric mice. Microarray analysis revealed that the gene encoding indoleamine 2,3-dioxygenase 1 (IDO1), a major enzyme involved in the tryptophan metabolic process, was highly induced by LMP1. Either inhibition of IDO1 activity by methyl-l-tryptophan or knockout of Ido1 in LMP1+ B cells could rescue WT B cells from such suppression. IDO1-induced tryptophan consumption and production of tryptophan metabolites appeared to be responsible for inhibition of B-cell function. We conclude that LMP1 expression in antigen-committed B cells not only directly impairs GC B-cell differentiation, but also indirectly inhibits the functions of neighboring B cells, resulting in suppression of humoral immune responses. Such bystander inhibition by LMP1+ B cells may contribute to immune evasion by EBV.