Fibroblast-like synoviocytes (FLS) and T cells can activate each other in vitro, and in vivo interactions between these cells may be important in rheumatoid arthritis (RA), yet FLS lack significant expression of CD28 ligands. We sought to identify molecules homologous to CD28 ligands that are strongly expressed by FLS, and documented strong B7-H3 expression on FLS and by fibroblasts of other tissues, which was unaffected by a variety of cytokines. Western blot analysis of FLS lysates showed predominant expression of the larger, four Ig-like domain isoform of B7-H3. Immunohistological sections of RA synovial tissue showed strong staining for B7-H3 on FLS. Cells expressing B7-H3 were distinct from but in close proximity to cells that expressed CD45, CD20, and CD3. Confocal microscopy of FLS and T cell cocultures showed localization of B7-H3 in the region of the T cell-FLS contact point, but distinct from the localization of T cell CD11a/CD18 (LFA-1) and FLS CD54 (ICAM-1). Reduction of B7-H3 expression on FLS by RNA interference affected interactions of FLS with resting T cells or cytokine-activated T cells. Resting T cells showed increased production of TNF-alpha, IFN-gamma, and IL-2, whereas cytokine-activated T cells showed reduced cytokine production relative to control. However, cytokine production by T cells activated through their TCR was not notably altered by knock down of B7-H3. These observations suggest that B7-H3 may be important for the interactions between FLS and T cells in RA, as well as other diseases, and the outcome of such interactions depends on the activation state of the T cell.