Abstract The B7 homolog B7‐H3 is important for the regulation of immune responses though its functions in vivo are controversial. We report the first clinical and experimental data concerning expression and function of B7‐H3 in alloresponses. Immunohistological and molecular analyses showed B7‐H3 expression by cells mediating rejection of human and mouse allografts. To analyze the significance of B7‐H3 in rejecting allografts, we generated B7‐H3 –/– mice and showed that targeting of B7‐H3 was synergistic with other forms of immune modulation; e.g. a regimen of rapamycin gave 12–14 days of survival in wild‐type controls but led to permanent cardiac and islet allograft survival in B7‐H3 –/– mice. Cardiac allografts in treated B7‐H3 –/– mice showed markedly decreased production of key cytokine, chemokine and chemokine receptor mRNA transcripts as compared to wild‐type controls. The incidence of chronic rejection in two different cardiac allograft models was also inhibited in B7‐H3 –/– as compared to wild‐type recipients. Lastly, in addition to the expected antigen‐presenting cell expression of B7‐H3, CD4 and CD8 T cells showed B7‐H3 induction upon cell activation, and both dendritic cell‐ and T cell‐expressed B7‐H3 each enhanced T cell proliferation in vitro and in vivo . We conclude that B7‐H3 promotes T cell‐mediated immune responses and the development of acute and chronic allograft rejection.