The B7 family consists of activating and inhibitory co-stimulatory molecules that positively and negatively regulate immune responses. Recent studies have shown that human and rodent cancer cells, and stromal cells and immune cells in the cancer microenvironment upregulate expression of inhibitory B7 molecules and that these contribute to tumour immune evasion. In this Review, we focus on the roles of these B7 molecules in the dynamic interactions between tumours and the host immune system, including their expression, regulation and function in the tumour microenvironment. We also discuss novel therapeutic strategies that target these inhibitory B7 molecules and their signalling pathways to treat human cancer.