Alloreactive T-cell memory is present in every transplant recipient and endangers graft survival. Even in the absence of known sensitizing exposures, heterologous immunity and homeostatic T-cell proliferation generate ‘endogenous’ memory T cells with donor-reactivity. We have recently shown that endogenous donor-reactive CD8 memory T cells infiltrate murine cardiac allografts within hours of reperfusion and amplify early posttransplant inflammation by producing IFN-γ. Here, we have tested the role of ICOS co-stimulation in eliciting effector function from these memory T cells. ICOS is not expressed on the cell surface of circulating CD8 memory T cells but is rapidly upregulated during cell division within the allograft parenchyma. Donor-reactive CD8 memory T-cell infiltration, proliferation and ICOS expression are regulated by donor class I MHC molecule expression. ICOS blockade significantly reduced IFN-γ production and other proinflammatory functions of the activated CD8 memory T cells. Our data demonstrate that this induction of ICOS expression within peripheral tissues is an important feature of CD8 memory T-cell activation and identify ICOS as a specific target for neutralizing proinflammatory functions of endogenous CD8 memory T cells.