Costimulation blockade is an effective way to prevent allograft rejection. In this study, we tested the efficacy of two negative co-signaling molecules in protecting islet allograft function. We used local expression of B7-H4 by adenoviral transduction of islets (Ad-B7-H4) and systemic administration of CTLA-4.Ig to investigate the outcomes of allograft survival. Five groups of streptozotocin-induced diabetic C57BL/6 mice received 400 islets each from BALB/c donors. The groups consisted of control (G1); CTLA-4.Ig (G2); Ad-LacZ (G3); Ad-B7-H4 (G4); and Ad-B7-H4 and CTLA-4.Ig combined (G5). G1 and G3 developed graft failure on average of two weeks. G2, G4 and G5 survived for 43.8 ± 34.8, 54.7 ± 31.2 and 77.8 ± 21.5 d, respectively. Activated T and B cells in the lymph nodes were significantly controlled by CTLA-4.Ig treatment. Significantly reduced infiltrates were also detected in the allografts of G2 compared with G1. By contrast, B7-H4 significantly inhibited Th1-associated IFN-gamma secretion in the early stage and increased Foxp3 (+) T cells in the long-term surviving allografts. Our study suggests that CTLA-4 and B7-H4 inhibit alloimmune responses through distinct mechanisms, and that combination therapy which activates two negative co-signaling pathways can further enhance islet allograft survival.