Inflammatory Bowel Disease-associated colorectal cancer (IBD-CRC) is a known and serious complication of Inflammatory Bowel Disease (IBD) affecting the colon. However, relatively little is known about the pathogenesis of IBD-associated colorectal cancer in comparison with its sporadic cancer counterpart. Here, we investigated the function of Dock2, a gene mutated in ~10% of IBD-associated colorectal cancers that encodes a guanine nucleotide exchange factor (GEF). Using a genetically engineered mouse model of IBD-CRC, we found that whole body loss of Dock2 increases tumourigenesis via immune dysregulation. Dock2-deficient tumours displayed increased levels of IFNγ-associated genes, including the tryptophan metabolising, immune modulatory enzyme, IDO1, when compared to Dock2-proficient tumours. This phenotype was driven by increased IFNγ-production in T cell populations, which infiltrated Dock2-deficient tumours, promoting IDO1 expression in tumour epithelial cells. We show that IDO1 inhibition delays tumourigenesis in Dock2 knockout mice, and we confirm that this pathway is conserved across species as IDO1 expression is elevated in human IBD-CRC and in sporadic CRC cases with mutated DOCK2. Together, these data demonstrate a previously unidentified tumour suppressive role of DOCK2 that limits IFNγ-induced IDO1 expression and cancer progression, opening potential new avenues for therapeutic intervention.