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Allograft rejection is one of the main obstacles for islet transplantation. B7-H4 plays a key role in maintaining T-cell homeostasis by reducing T-cell proliferation and cytokine production. In this study, we investigated whether the endogenous expression of B7-H4 in β cells from B7-H4 transgenic mice enhances islet allograft survival.B7-H4 transgenic C57BL/6 (B6) mice (RIP.B7-H4) were developed by inserting the entire B7-H4 open reading frame under the rat insulin promoter (RIP). B7-H4 protein expression was examined by flow cytometric analysis and immunohistochemical staining. Islet allograft survival was investigated in streptozotocin-induced diabetic recipient BALB/c (H-2d) mice transplanted with 400 islets from RIP.B7-H4 (H-2b) mice under the kidney capsule. The recipient control group received islets from wild-type B6 donors.B7-H4 protein was significantly up-regulated in isolated islets from RIP.B7-H4 compared with wild-type B6 mice (56%±23% vs. 3%±1.2%). B7-H4 was coexpressed with insulin, but not glucagon, suggesting that B7-H4 is expressed in a β-cell–specific manner. Recipient BALB/c mice transplanted with RIP.B7-H4 islets established euglycemia for 42.3±18.4 days (mean±SD; n=9) compared with controls at 23.1±7.8 days (mean±SD; n=12; P<0.004, log-rank test).The endogenous expression of B7-H4 in donor β cells from transgenic mice prolongs islet allograft survival, confirming the negative role of B7-H4 in regulating alloreactive T-cell responses.