T cell activation is affected by both stimulatory and inhibitory co-signaling. MHC class II-expressing renal tubular epithelial cells (TEC) can function as APC for T cells. To study the influence of inhibitory ligands on TEC-mediated T cell activation, we examined the expression of programmed death ligand-1 (PD-L1) on human TEC line HK-2 cells, as well as in normal and diseased kidney samples. RT-PCR, FACS, and immunocytochemistry showed that PD-L1 is constitutively expressed on HK-2 cells, and is dramatically upregulated by IFN-gamma. In situ hybridization and immunohistochemical staining revealed constitutive low expression of PD-L1 on proximal tubules at both mRNA and protein levels in normal kidneys, but much higher expression in kidneys with type IV lupus nephritis. In vitro, pretreatment of IFN-gamma-stimulated HK-2 cells with anti-PD-L1 significantly enhanced IL-2 secretion from cocultured, mitogen-activated Jurkat or human peripheral blood T cells. These results suggest that the PD-L1:PD-1 pathway negatively regulates T cell activation by TEC, and may play an inhibitory role in TEC-mediated immune activation and immunopathology in the kidney.