Tumor-associated macrophages are a prominent component of ovarian cancer stroma and contribute to tumor progression. B7-H4 is a recently identified B7 family molecule. We show that primary ovarian tumor cells express intracellular B7-H4, whereas a fraction of tumor macrophages expresses surface B7-H4. B7-H4(+) tumor macrophages, but not primary ovarian tumor cells, suppress tumor-associated antigen-specific T cell immunity. Blocking B7-H4-, but not arginase-, inducible nitric oxide synthase or B7-H1 restored the T cell stimulating capacity of the macrophages and contributes to tumor regression in vivo. Interleukin (IL)-6 and IL-10 are found in high concentrations in the tumor microenvironment. These cytokines stimulate macrophage B7-H4 expression. In contrast, granulocyte/macrophage colony-stimulating factor and IL-4, which are limited in the tumor microenvironment, inhibit B7-H4 expression. Ectopic expression of B7-H4 makes normal macrophages suppressive. Thus, B7-H4(+) tumor macrophages constitute a novel suppressor cell population in ovarian cancer. B7-H4 expression represents a critical checkpoint in determining host responses to dysfunctional cytokines in ovarian cancer. Blocking B7-H4 or depleting B7-H4(+) tumor macrophages may represent novel strategies to enhance T cell tumor immunity in cancer.