Myeloid-derived suppressor cells (MDSCs) accumulate in tumor-bearing hosts and are associated with immune suppression. Here, we described high level of expression of B7-H1 (CD274), PD-1 (CD279) and CTLA4 (CD152) by Gr-1(+)CD11b(+) MDSCs obtained from both ascites and spleens of mice bearing the 1D8 ovarian carcinoma, whereas B7-DC (CD273), CD40 and CD86 were absent. In contrast, B7-H1, PD-1 and CTLA-4 expression was not detected on Gr-1(+)CD11b(+) cells from naive mice. Expression of B7-H1 by Gr-1(+)CD11b(+) cells from naive mice could be induced by co-culture with 1D8 ovarian carcinoma cells. Gr-1(+)CD11b(+) cells derived from 1D8 tumor-bearing mice markedly suppressed antigen-specific immune responses, whereas Gr-1(+)CD11b(+) cells from naive mice did not. siRNA-mediated knockdown of B7-H1 in Gr-1(+)CD11b(+) cells of 1D8 tumor-bearing mice alleviated suppression of antigen-specific immune responses. Suppression of antigen-specific immune responses via B7-H1 on Gr-1(+)CD11b(+) myeloid cells was mediated by CD4(+)CD25(+) Foxp3(+) T regulatory cells and required PD-1. Antibody blockade of either B7-H1 or PD-1 retarded the growth of 1D8 tumor in mice. This suggests that expression of B7-H1 on Gr-1(+)CD11b(+) myeloid cells triggered by the 1D8 mouse model of ovarian carcinoma suppresses antigen-specific immunity via interaction with PD-1 on CD4(+)CD25(+) Foxp3(+) regulatory T cells.