B7-H1 and B7-DC expressed on antigen-presenting cells inhibit the T-cell response via the PD-1 counter-receptor on T cells, and co-stimulate T-cell immunity under certain conditions via an unidentified co-stimulatory receptor. However, little is known about the functional consequence of T-cell-associated B7-H1 or B7-DC in the T-cell immune response. Therefore, we evaluated the physiological role of B7-H1 and B7-DC expressed on T cells in terms of cell proliferation and cytokine production by alloreactive T cells. We found that PD-1, B7-H1, and B7-DC were up-regulated in alloreactive CD4(+) and CD8(+) T cells in vitro and in vivo. In the alloreactive T-T model, blockade of the B7-H1:PD-1 or B7-DC:PD-1 pathways significantly increased the proliferation, and IFN-gamma and IL-2 production of alloreactive T cells, although it did not affect the production of other cytokines, including IL-4, IL-10, and IL-12. The data indicate that T-cell-associated B7-H1 and B7-DC negatively regulate the T-cell response via the T-T interaction.