The interaction of programmed death-1 (PD-1) expressed on T cells with its ligands B7H1 (PDL1) and B7DC (PDL2) is known to be a mechanism of T cell inhibition. In the present study, we examined whether human or murine retinal pigment epithelial (RPE) cells express B7H1 and B7DC, and if so, whether these molecules expressed on RPE cells play an inhibitory role via interaction with T cells. The transcriptional levels and surface expression of B7H1 and B7DC on human RPE cell line (ARPE-19), RPE cells freshly isolated from healthy human subjects, and murine RPE cells were studied by reverse transcription-polymerase chain reaction (RT-PCR) and flow cytometry. In addition, T cells from healthy subjects were cultured with ARPE-19 for 72h in the presence or absence of monoclonal antibody (mAb) to B7H1 or B7DC, and cytokine production (IFN-gamma, IL-8, and MCP-1) was measured. Messenger RNA and cell surface protein expression of B7H1 and B7DC were demonstrated on non-stimulated ARPE-19 and freshly isolated human RPE cells, and the expression of these molecules was predominantly upregulated by treatment with IFN-gamma. In murine RPE cells, B7H1 expression was detected only when stimulated with IFN-gamma. IFN-gamma, IL-8, and MCP-1 production by T cells co-cultured with IFN-gamma-untreated or -treated ARPE-19 was significantly enhanced in the presence of anti-B7H1 mAb. These data suggest that B7H1 expressed on RPE cells plays an immunosuppressive role in ocular inflammation, which may contribute to immune privilege in the posterior segment of the eye.