Human glioblastoma is a highly lethal tumor that is known for its immune inhibitory capabilities. B7-homologue 1 (B7-H1), a recently identified homologue of B7.1/2 (CD80/86), has been described to exert costimulatory and immune regulatory functions. We investigated the expression and the functional activity of B7-H1 in human glioma cells in vitro and in vivo. Although lacking B7.1/2 (CD80/86), all 12 glioma cell lines constitutively expressed B7-H1 mRNA and protein. Exposure to IFN-γ strongly enhanced B7-H1 expression. Immunohistochemical analysis of malignant glioma specimens revealed strong B7-H1 expression in all 10 samples examined, whereas no B7-H1 expression could be detected on normal brain tissues. To elucidate the functional significance of glioma cell-related B7-H1 expression, we performed coculture experiments of glioma cells with alloreactive CD4+ and CD8+ T cells. Glioma-related B7-H1 was identified as a strong inhibitor of CD4+ as well as CD8+ T-cell activation as assessed by increased cytokine production (IFN-γ, interleukin-2, and interleukin-10) and expression levels of the T-cell activation marker (CD69) in the presence of a neutralizing antibody against B7-H1 (mAb 5H1). B7-H1 expression may thus significantly influence the outcome of T-cell tumor cell interactions and represents a novel mechanism by which glioma cells evade immune recognition and destruction.