Renal proximal tubular epithelial cells, a target of infiltrating T cells during renal allograft rejection, may be protected from this injury by the cell surface protein CD274 (also termed PD-L1 for programmed death ligand 1). The co-inhibitory molecules PD-L1 (CD274) and PD-L2 (CD273) are ligands of PD-1 (programmed death 1; CD279). Here we determine the functional role of PD-1/PD-L pathways in human renal allograft rejection. Treatment of human primary tubular epithelial cells with interferon-beta and -gamma caused a dose-dependent and synergistic increase of PD-L1 and PD-L2 expression. Blockade of surface PD-L1, but not PD-L2, on interferon-treated tubular epithelial cells resulted in a significant increase in CD4+ T-cell proliferation and cytokine production by CD4+ and CD8+ T cells. The expression of PD-L1, PD-L2, and PD-1 mRNA and protein was upregulated in biopsies of patients with renal allograft rejection compared to the respective levels found in the pre-transplant biopsies. Induction of PD-L1 was significantly associated with acute vascular rejection. Our study suggests that the renal epithelial PD-1/PD-L1 pathway exerts an inhibitory effect of on alloreactive T-cell responses. The upregulation of PD-L1 on proximal tubular epithelial cells in patients with acute allograft rejection may reduce T-cell-mediated injury.