B7 molecules provide important costimulatory signals to T cells, and B7 genes have been introduced into B7-negative tumor cells to enhance their immunogenicity. However, the role of B7 molecules in inducing tumor immunity is controversial because of conflicting results and reports of differential signaling through the B7 molecules and their ligands CD28 and CTLA-4. In this study, we compared the effect of B7-1 (CD80) and B7-2 (CD86) on the induction of T-cell immunity to C1498, a murine myelogenous leukemia. When cultured with exogenous cytokines in vitro, C1498/B7-1 and C1498/B7-2 induced syngeneic CD8⁺ T cells to kill parental C1498. In vivo, C1498/B7-1 grew progressively after subcutaneous injection, whereas C1498/B7-2 completely regressed after transient growth in naive mice. Spontaneous rejection of C1498/B7-2 resulted in immunity to challenge doses of C1498 and C1498/B7-1. Antibody-depletion studies in vivo showed that CD8⁺ T cells rejected C1498/B7-2, whereas only natural killer cells affected the growth of C1498/B7-1. Two approaches were used to determine whether preferential interaction of B7-1 with CTLA-4 contributed to the failure of C1498/B7-1 to activate CD8⁺ T cells in vivo. First, CTLA-4 specific monoclonal antibody was used to block B7-1–CTLA-4 interaction. Second, CTLA-4 deletional mutant (−/−) bone marrow chimeras were used as tumor hosts. In both systems, there was a significant increase in the rate of rejection of C1498/B7-1 tumors. Resistance to C1498/B7-1 in CTLA-4^−/− hosts was mediated by CD8⁺ T cells. Blocking or deletion of CTLA-4 did not affect the growth of parental C1498, indicating that B7-1 was important for the induction of CD8⁺ T-cell immunity in the absence of CTLA-4.