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B7 family members are aberrantly expressed on the human hepatocellular carcinoma (HCC) cell surface, and induce local and systemic immunosuppression. Tumor-associated macrophages (TAMs) are a significant immune cell subpopulation in HCC and may be induced to express co-inhibitory molecules including B7 homologue 3 (B7-H3). In the present study, 79.3% of the HCC tissue samples showed high expression of B7-H3 which was positively correlated with the number of TAMs in the evaluated cancer tissues. Furthermore, high levels of TAMs or B7-H3 were associated with a shorter survival time of the HCC patients. In vitro, B7-H3 expression was upregulated at both the mRNA and protein levels in phorbol 12-myristate 13-acetate (PMA)-induced THP-1 cells cocultured with HepG2 cells in a Transwell system. In addition, B7-H3 promoted PMA-induced THP-1 cells to differentiate into the M2 phenotype, with evidence of increases in arginase 1 (Arg1), vascular endothelial cell growth factor (VEGF) and macrophage-derived chemokine (CCL22) mRNA following coculture with HepG2 cells. However, this phenomenon was abrogated through knockdown of B7-H3 by RNA interference or by blocking the signal transducer and activator of trans-cription 3 (STAT3) signaling pathway. Overall, these results suggest that the B7-H3-mediated STAT3 signaling pathway is an important mechanism for inducing M2-type polarization of TAMs, which accelerates HCC development. Our findings may support the development of novel therapeutic strategies for HCC patients through the skewing of the TAM phenotype by targeting the B7-H3 signaling pathway.