Programmed death‐1 (PD‐1)/B7‐H1 costimulation acts as a negative regulator of host alloimmune responses. Although CD4 T cells mediate innate immunity‐dominated ischemia and reperfusion injury (IRI) in the liver, the underlying mechanisms remain to be elucidated. This study focused on the role of PD‐1/B7‐H1 negative signaling in liver IRI. We used an established mouse model of partial liver warm ischemia (90 minutes) followed by reperfusion (6 hours). Although disruption of PD‐1 signaling after anti–B7‐H1 monoclonal antibody treatment augmented hepatocellular damage, its stimulation following B7‐H1 immunoglobulin (B7‐H1Ig) fusion protected livers from IRI, as evidenced by low serum alanine aminotransferase levels and well‐preserved liver architecture. The therapeutic potential of B7‐H1 engagement was evident by diminished intrahepatic T lymphocyte, neutrophil, and macrophage infiltration/activation; reduced cell necrosis/apoptosis but enhanced anti‐necrotic/apoptotic Bcl‐2/Bcl‐xl; and decreased proinflammatory chemokine/cytokine gene expression in parallel with selectively increased interleukin (IL)‐10. Neutralization of IL‐10 re‐created liver IRI and rendered B7‐H1Ig–treated hosts susceptible to IRI. These findings were confirmed in T cell–macrophage in vitro coculture in which B7‐H1Ig diminished tumor necrosis factor‐α/IL‐6 levels in an IL‐10–dependent manner. Our novel findings document the essential role of the PD‐1/B7‐H1 pathway in liver IRI. Conclusion: This study is the first to demonstrate that stimulating PD‐1 signals ameliorated liver IRI by inhibiting T cell activation and Kupffer cell/macrophage function. Harnessing mechanisms of negative costimulation by PD‐1 upon T cell–Kupffer cell cross‐talk may be instrumental in the maintenance of hepatic homeostasis by minimizing organ damage and promoting IL‐10–dependent cytoprotection. (HEPATOLOGY 2010.)