B7-DC, one of the recently described B7 family members, has the capacity to inhibit T cell responses via engagement of the immunoreceptor tyrosine-based inhibitory motif–containing inhibitory PD-1 receptor as well as enhance responses via an as yet unidentified costimulatory receptor. B7-DC is highly homologous to a coinhibitory B7 family member, B7-H1, which also binds PD-1. It is currently unclear which B7-DC function—costimulation or inhibition—predominates in vivo. To study in vivo functions of B7-DC, we evaluated immune responses in B7-DC knockout (KO) mice. Although not eliminated, interferon-γ (IFN-γ) production by CD4 T cells and IFN-γ–dependent humoral responses were reduced in B7-DC KO mice relative to wild type mice. Antigen-specific CD8 T cell responses and cytotoxic T lymphocyte (CTL) activity were also diminished in B7-DC KO mice. Hepatic tumors grew more quickly in B7-DC KO mice, associated with a decrease in intrahepatic tumor-specific CD8 T cells. These results highlight the contrasting in vivo roles of B7-DC and B7-H1 and indicate that B7-DC functions as a tuning molecule, selectively augmenting T helper 1 and CTL responses.