Although self-reactive T-cell precursors can be eliminated upon recognition of self-antigen presented in the thymus, this central tolerance process is often incomplete, and additional mechanisms are required to prevent autoimmunity. Recent studies indicates that the interaction between B7-H1 and its receptor PD-1 on activated T cells plays an important role in the inhibition of T-cell responses in peripheral organs. Here, we show that, before their exit to the periphery, T cells in lymphoid organs rapidly up-regulate PD-1 upon tolerogen recognition. Ablation of the B7-H1 and PD-1 interaction when T cells are still in lymphoid organs prevents anergy. Furthermore, blockade of B7-H1 and PD-1 interaction could render anergic T cells responsive to antigen. Our results thus reveal previously unappreciated roles of B7-H1 and PD-1 interaction in the control of initiation and reversion of T-cell anergy.