Although B7 on APCs has a well-recognized role in T cell costimulation, little is known about the functional significance of constitutive and activation-induced B7 expression that also occurs on T cells. To analyze the role of B7 on T cells, B7-1/B7-2-deficient mice (B7 double knockout) and mice overexpressing B7-2 exclusively on T cells (B7-2 transgenic) were used as T cell donors for allogeneic transplant recipients, and graft-vs-host disease (GVHD) was assessed. B7 double-knockout T cells resulted in significant GVHD acceleration compared with wild-type T cells. Conversely, B7-2 transgenic donor T cells mediated reduced GVHD mortality compared with wild-type T cells. Data indicated that B7 expression on T cells down-regulated alloresponses through CTLA-4 ligation. This study is the first to provide definitive in vivo data illustrating the importance of T cell-associated B7 as a negative regulator of immune responses in a clinically relevant murine model of GVHD. The up-regulation of B7 on T cells may be an important component of normal immune homeostasis.