Within the ovarian cancer microenvironment, there are several mechanisms that suppress the actions of antitumor immune effectors. Delineating the complex immune microenvironment is an important goal toward developing effective immune-based therapies. A dominant pathway of immune suppression in ovarian cancer involves tumor-associated and dendritic cell (DC)-associated B7-H1. The interaction of B7-H1 with PD-1 on tumor-infiltrating T cells is a widely cited theory of immune suppression involving B7-H1 in ovarian cancer. Recent studies suggest that the B7-H1 ligand, programmed death receptor-1 (PD-1), is also expressed on myeloid cells, complicating interpretations of how B7-H1 regulates DC function in the tumor. In this study, we found that ovarian cancer-infiltrating DCs progressively expressed increased levels of PD-1 over time in addition to B7-H1. These dual-positive PD-1(+) B7-H1(+) DCs have a classical DC phenotype (i.e., CD11c(+)CD11b(+)CD8(-)), but are immature, suppressive, and respond poorly to danger signals. Accumulation of PD-1(+)B7-H1(+) DCs in the tumor was associated with suppression of T cell activity and decreased infiltrating T cells in advancing tumors. T cell suppressor function of these DCs appeared to be mediated by T cell-associated PD-1. In contrast, ligation of PD-1 expressed on the tumor-associated DCs suppressed NF-κB activation, release of immune regulatory cytokines, and upregulation of costimulatory molecules. PD-1 blockade in mice bearing ovarian cancer substantially reduced tumor burden and increased effector Ag-specific T cell responses. Our results reveal a novel role of tumor infiltrating PD-1(+)B7-H1(+) DCs in mediating immune suppression in ovarian cancer.