CD4⁺CD25⁺Foxp3⁺ T-regulatory cells (Tregs) accumulate in tumors; however, little is known about how the tumor environment influences this process. Here we show that human melanomas express inducible T-cell costimulator ligand (ICOS-L/B7H) that can provide costimulation through ICOS for the expansion of activated Tregs maintaining high Foxp3 and CD25 expression as well as a suppressive function. Thus, ICOS-L expression by melanoma tumor cells may directly drive Treg activation and expansion in the tumor microenvironment as another mechanism of immune evasion. Cancer Res; 70(23); 9581–90. ©2010 AACR.