B7/CTLA-4 interactions negatively regulate T-cell responses and are necessary for transplant tolerance induction. Tolerance induction may therefore be facilitated by selectively inhibiting the B7/CD28 pathway without blocking that of B7/CTLA-4. In this study, we selectively inhibited CD28/B7 interactions using a monoclonal antibody modulating CD28 in a rat model of acute kidney graft rejection. A short-term treatment abrogated both acute and chronic rejection. Tolerant recipients presented few alloantibodies against donor MHC class II molecules, whereas untreated rejecting controls developed anti-MHC class I and II alloantibodies. PBMC from tolerant animals were unable to proliferate against donor cells but could proliferate against third-party cells. The depletion of B7+, non-T cells fully restored this reactivity whereas purified T cells were fully reactive. Also, NK cells depletion restored PBMC reactivity in 60% of tolerant recipients. Conversely, NK cells from tolerant recipients dose-dependently inhibited alloreactivity. PBMC anti-donor reactivity could be partially restored in vitro by blocking indoleamine-2,3-dioxygenase (IDO) and iNOS. In vivo, pharmacologic inhibition of these enzymes led to the rejection of the otherwise tolerated transplants. This study demonstrates that an initial selective blockade of CD28 generates B7+ non-T regulatory cells and a kidney transplant tolerance sustained by the activity of IDO and iNOS.