B7 homolog 1 (B7-H1) is the most potent immunoinhibitory molecule in the B7 family. In this study, we examined the effects of tumor-associated B7-H1 on T-cell proliferation in lung cancer. The expression of B7-H1 in human adenocarcinoma A549 and mouse Lewis lung carcinoma (LLC) cells were examined by flow cytometry. To assess the in vitro effect of tumor-associated B7-H1 on T-cell proliferation, we isolated T cells from peripheral blood mononuclear cells (PBMCs) of healthy individuals, labeled them with carboxyfluorescein succinimidyl ester, and co-cultured them with A549 cells in the absence or presence of anti-B7-H1 antibody. For in vivo analysis, LLC cells were subcutaneously injected into mice treated or not with anti-B7-H1 antibody. T-cell proliferation in both in vitro and in vivo assays was analyzed by flow cytometry. In vitro, co-culturing T cells with A549 cells significantly inhibited the proliferation of the former compared with the proliferation of T cells alone (P<0.01), and the addition of B7-H1 blocking antibody dramatically reversed the inhibition of T-cell proliferation by A549 cells. Similarly, in mice bearing LLC-derived xenograft tumors, in vivo administration of anti-B7-H1 antibody significantly increased the total number of spleen and tumor T cells compared to levels in control mice that did not receive anti-B7-H1 antibody. Functionally, in vivo administration of anti-B7-H1 antibody markedly reduced tumor growth. Tumor-associated B7-H1 may facilitate immune evasion by inhibiting T-cell proliferation. Targeting of this mechanism offers a promising therapy for cancer immunotherapy.