In a successful pregnancy, the semiallogeneic fetus is not rejected by the maternal immune system, which implies tolerance mechanisms protecting fetal tissues from maternal immune attack. Here we report that the ICOS-B7h costimulatory pathway plays a critical role in maintaining the equilibrium at the fetomaternal interface. Blockade of this pathway increased fetal resorption and decreased fetal survival in an allogeneic pregnancy model (CBA female × B6 male). Locally in the placenta, levels of regulatory markers such as IDO and TGF-β1 were reduced after anti-B7h monoclonal antibody treatment, whereas levels of effector cytokines (eg, IFN-γ) were significantly increased. In secondary lymphoid organs, enhanced IFN-γ and granzyme B production (predominantly by CD8+ T cells) was observed in the anti-B7h–treated group. The deleterious effect of B7h blockade in pregnancy was maintained only in CD4 knockout mice, not in CD8 knockout mice, which suggests a role for CD8+ T cells in immune regulation by the ICOS-B7h pathway. In accord, regulatory CD8+ T cells (in particular, CD8+CD103+ cells) were significantly decreased after anti-B7h monoclonal antibody treatment, and adoptive transfer of this subset abrogated the deleterious effect of B7h blockade in fetomaternal tolerance. Taken together, these data support the hypothesis that B7h blockade abrogates tolerance at the fetomaternal interface by enhancing CD8+ effector response and reducing local immunomodulation mediated by CD8+ regulatory T cells.