Acceptance of the fetus expressing allogeneic paternal Ags by the mother is a physiologic model of transplantation tolerance. Various mechanisms contribute to fetal evasion from immune attack by maternal leukocytes. We have recently demonstrated that the inhibitory costimulatory molecule PDL1 plays a critical role in fetomaternal tolerance in that PDL1 blockade or deficiency resulted in decreased allogeneic fetal survival rates. CD4+CD25+ T regulatory cells (Tregs) have also been demonstrated to play an important role in fetomaternal tolerance. Since PDL1 is expressed on Tregs, we explored the interactions between PDL1 and Tregs in vivo in a mouse model of fetomaternal tolerance. Depletion of CD25+ T cells abrogated the effect of anti-PDL1 Ab indicating that the effect of PDL1 is possibly mediated by CD25+ Tregs. Adoptive transfer of Tregs from wild-type but not PDL1-deficient mice into PDL1-deficient recipients significantly improved fetal survival. The frequency, phenotype and placental trafficking of Tregs from PDL1-deficient mice were similar to those of wild-type controls, but were defective in inhibiting alloreactive Th1 cells in vitro. This is the first report providing evidence for a link between PDL1 and T regulatory cells in mediating fetomaternal tolerance.