B7-H4 has been shown to inhibit T cell proliferation, cytokine production and cell cycle in vitro. B7-H4 deficient mice develop exacerbated disease in the mouse models of Rheumatoid Arthritis (RA), Type 1 Diabetes (T1D) and Experimental Autoimmune Encephalomyelitis (EAE). On the other hand, B7-H4-Ig fusion protein has been documented to assuage the symptoms in mouse models of RA, T1D, and multiple sclerosis in vivo. In the present study, B7-H4-Ig bound to the majority of human peripheral blood monocytes and NK cells, but not to either normal or activated T cells. B7-H4-Ig fusion protein was assayed for its effects in allogeneic mixed lymphocyte culture (MLC) systems. Soluble B7- H4-Ig had no significant effect in the MLC, but with a tendency to promote allogeneic response. Immobilized, but not soluble B7-H4-Ig inhibited plastic bound anti-CD3 mediated activation of T cells. This inhibition however was largely due to B7-H4-Ig mediated displacement of anti-CD3 antibody from the plastic plate. Finally, B7-H4-Ig had no effect on the cytotoxicity mediated by NK and LAK cells in PBMC. Our findings thus caution against the interpretation of suppressive effect observed solely in plate-bound anti-CD3 mediated T cell co-stimulation in vitro.