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The immune system has developed several regulatory mechanisms to maintain homeostasis of adaptive immune responses. T-cell programmed death (PD)-1 recognition of B7-H1 (PD-L1) expressed on APC and non-lymphoid tissue regulates T-cell activation. We show that B7-H1(-/-) mice exhibit exacerbated proteoglycan (PG)-induced arthritis and increased Th-1 CD4(+) T-cell responses. Unexpectedly, the PG-specific antibody response in B7-H1(-/-) mice was diminished. A reduction in the number of peanut agglutinin(+) GC coincided with a decrease in CD19(+) GL-7(+) CD95(+) GC B cells that was a result of increased caspase-induced apoptosis. The percent of CD38(+) CD138(+) emerging plasma cells was decreased. B7-H1(-/-) mice exhibited an increased frequency of CD4(+) PD-1(hi) CXCR5(hi) ICOS(hi) CD62L(lo) T follicular helper cells that displayed a hyperactive phenotype with increased expression of mRNA transcripts for Bcl6, IL-21, and the apoptosis-inducer molecule FasL. In cell transfer of B7-H1(-/-) cells into SCID mice, non-B and non-T cells were sufficient to normalize the antibody response, T-cell hyperactivity, and the development of PG-induced arthritis. These findings indicate that B7-H1 on non-B and non-T cells signals through PD-1 on T effector cells to prevent excessive activation and reduce autoimmune arthritis. Furthermore, these findings demonstrate a novel role for B7-H1 expression in promoting B-cell survival by regulating the activation of T follicular helper cell.