Identifying relevant mediators responsible for the pathogenesis during sepsis may lead to finding novel diagnostic and therapeutic targets. Recent studies indicate programmed cell death receptor (PD)-1 plays a significant role in the development of immune suppression associated with sepsis. In this study, we determine whether B7-H1, the primary ligand of PD-1, contributes to the pathogenesis of sepsis. We report that B7-H1 is upregulated extensively on various immune cells during sepsis and B7-H1 gene deficiency protects mice from the lethality of sepsis. In terms of the histological development of multiple organ damage and inflammatory cytokine levels in circulation or at infectious site, B7-H1-deficient mice showed a remarkable reduction in these indices when compared with wild-type mice. However, B7-H1 gene-deficient mice did not exhibit a lower bacterial burden when compared with wild-type mice, although they recruited more macrophages and neutrophils into infectious site. In addition, we found that, during sepsis, whereas there were no marked differences affecting ex vivo macrophage cytokine productive capacity between PD-1 and B7-H1 gene-deficient mice, preservation of ex vivo macrophage phagocytic function was only seen in septic PD-1 knockout mouse cells. Finally, higher percentage B7-H1(+) neutrophils in peripheral blood correlated not only with higher levels of pro- and anti-inflammatory cytokines/chemokines (CCL2, IL-6, CXCL2, KC, TNF-α, and IL-10), but with lethal outcome as well. Together, these results indicate B7-H1 contributes to septic morbidity in fashion distinct from PD-1 and suggest B7-H1 expression on neutrophils could be used as a biomarker of septic severity.