The interaction between tumor and the immune system is still poorly understood. Significant clinical responses have been achieved in cancer patients treated with antibodies against the CTLA4 and PD-1/PD-L1 checkpoints; however, only a small portion of patients responded to the therapies, indicating a need to explore additional co-inhibitory molecules for cancer treatment. B7-H3, a member of the B7 superfamily, was previously shown by us to inhibit T-cell activation and autoimmunity. In this study, we have analyzed the function of B7-H3 in tumor immunity. Expression of B7-H3 was found in multiple tumor lines, tumor-infiltrating dendritic cells, and macrophages. B7-H3-deficient mice or mice treated with an antagonistic antibody to B7-H3 showed reduced growth of multiple tumors, which depended on NK and CD8+ T cells. With a putative receptor expressed by cytotoxic lymphocytes, B7-H3 inhibited their activation, and its deficiency resulted in increased cytotoxic lymphocyte function in tumor-bearing mice. Combining blockades of B7-H3 and PD-1 resulted in further enhanced therapeutic control of late-stage tumors. Taken together, our results indicate that the B7-H3 checkpoint may serve as a novel target for immunotherapy against cancer.