B7-H4, a recently discovered member of B7 family, can negatively regulate T cell responses. However, it is not clear whether B7-H4 negatively function in cell transplantation. In this study we investigated the immunosuppressive effect of B7-H4 on beta-cell transplantation. An insulinoma cell line, NIT-1, transfected with B7-H4 (B7-H4-NIT) was established, and transplanted to diabetic C57BL/6 mice by intraperitoneal injection. Proliferation assay of splenocytes in vitro showed that B7-H4-NIT suppressed alloreactive T cell activation. The proportion of IFN-gamma-producing cells in recipient spleen was significantly reduced and the number of Treg cells was upregulated in B7-H4-NIT group compared to the control, EGFP-NIT. The expression of mRNA coding IFN-gamma was lower but that of IL-4 was higher in B7-H4-NIT transplanted recipients than in the control animals. The results of ELISA also revealed the same trends. Diabetic mice reached normalglycemic quickly and gained weight after transplantation of B7-H4-NIT. More importantly, the survival time for recipients transplanted with B7-H4-NIT cells was significantly longer than that with EGFP-NIT cells. These results indicate that B7-H4 transfection prolongs beta-cell graft survival.