The B7 homolog B7-H3 is important for the regulation of immune responses though its functions in vivo are controversial. We report the first clinical and experimental data concerning expression and function of B7-H3 in alloresponses. Immunohistological and molecular analyses showed B7-H3 expression by cells mediating rejection of human and mouse allografts. To analyze the significance of B7-H3 in rejecting allografts, we generated B7-H3-/- mice and showed that targeting of B7-H3 was synergistic with other forms of immune modulation; e.g. a regimen of rapamycin gave 12-14 days of survival in wild-type controls but led to permanent cardiac and islet allograft survival in B7-H3-/- mice. Cardiac allografts in treated B7-H3-/- mice showed markedly decreased production of key cytokine, chemokine and chemokine receptor mRNA transcripts as compared to wild-type controls. The incidence of chronic rejection in two different cardiac allograft models was also inhibited in B7-H3-/- as compared to wild-type recipients. Lastly, in addition to the expected antigen-presenting cell expression of B7-H3, CD4 and CD8 T cells showed B7-H3 induction upon cell activation, and both dendritic cell- and T cell-expressed B7-H3 each enhanced T cell proliferation in vitro and in vivo. We conclude that B7-H3 promotes T cell-mediated immune responses and the development of acute and chronic allograft rejection.