B7-DC is a recently discovered member of the B7 family that binds to PD-1 and is selectively expressed by dendritic cells (DCs). It has been shown to either costimulate or inhibit T cell responses. To assess the role of B7-DC in DC-T cell interactions, DCs from B7-DC knockout (KO) mice were generated and compared with DCs from wild-type (WT) and B7-1/B7-2 double KO mice. B7-1/B7-2-deficient DCs, while strongly diminished in their ability to stimulate naive CD4+ T cells, nonetheless retain partial activity. DCs from B7-DC KO mice are diminished in their ability to activate CD4+ T cells, demonstrating that DC-expressed B7-DC serves a predominantly stimulatory rather than inhibitory function in the initiation of T cell responses. B7-DC costimulates expression of CD40L with faster kinetics than B7-1 and displays potent synergy with B7-1 and B7-2 for T cell proliferation and cytokine production, indicating that these B7 family members work in concert to stimulate T cells. Finally, costimulation with B7-DC alone or in conjunction with B7-1 is PD-1 independent, indicating that B7-DC costimulates T cells via a second receptor.