B7 family proteins provide costimulatory signals that regulate T cell responses. Here we report the third set of B7 family-related T cell inhibitory molecules with the identification of a homolog of the B7 family, B7x. It is expressed in immune cells, nonlymphoid tissues, and some tumor cell lines. B7x inhibits cell-cycle progression, proliferation, and cytokine production of both CD4+ and CD8+ T cells. B7x binds a receptor that is expressed on activated, but not resting T cells that is distinct from known CD28 family members. Its receptor may be a recently identified inhibitory molecule, B and T lymphocyte attenuator. These studies identify a costimulatory pathway that may have a unique function in downregulation of tissue-specific autoimmunity and antitumor responses.