Upon systemic activation by antigens, CD8(+), but not CD4(+), T cells selectively accumulate and undergo apoptosis in the liver, a mechanism associated with the induction of hepatic tolerance and chronic infection. The molecular basis for CD8(+) T cell preference in this process is unknown. We prepared B7-H1-deficient mice by gene targeting and found spontaneous accumulation of CD8(+) T cells in the liver while CD4(+) T cell levels remained normal. Moreover, antigen-driven CD8(+) T cells proliferated normally while apoptotic levels during the contraction phase was selectively impaired in the liver, leading to accelerated hepatocyte damage in experimental autoimmune hepatitis. Therefore, B7-H1 is a key protein selectively regulating the accumulation and deletion of intrahepatic CD8(+) T cells and may also contribute to inflammation, autoimmune diseases, and tolerance in the liver.