Key Points• Absence of B7-H3 expression in allogeneic recipients or on allogeneic donor T cells leads to accelerated GVHD lethality.• Increased GVHD lethality is a result of increased T-cell proliferation, colon inflammatory cytokines, and intestinal permeability.Members of the B7 family have been shown to be important for regulating immune responses by providing either positive or negative costimulatory signals. The function of B7-H3 has been controversial. We show that B7-H3 is upregulated in graft-versus-host disease (GVHD) target organs, including the colon, liver, and lung. Infusion of allogeneic donor T cells into B7-H3 2/2 vs wild-type (WT) recipients resulted in increased GVHD lethality associated with increased T-cell proliferation, colonic inflammatory cytokines, and destruction of epithelial barriers. Allogeneic B7-H3 2/2 vs WT donor T cells also had increased T-cell proliferation and GVHD lethality associated with increased proliferation and cytokine secretion in the spleen, intraepithelial lymphocyte inflammatory cytokines, and intestinal permeability. Both resting and activated regulatory T cells (Tregs) lack B7-H3 messenger RNA. Consistent with these data, GVHD was augmented in recipients of B7-H3 2/2 Treg-depleted grafts. In two delayed lymphocyte infusion (DLI) models, T cells lacking B7-H3 are capable of providing graft-versus-leukemia (GVL) effects. We conclude that B7-H3 is responsible for providing a negative costimulatory signal. Our studies provide support for developing and testing new therapies directed toward the B7-H3 pathway, including approaches to augment host B7-H3 early after bone marrow transplantation to prevent GVHD and to develop potent antagonistic antibodies later after transplant to facilitate DLI-mediated GVL without GVHD complications. (Blood. 2015;125(21):3335-3346)