B7-H4 (VTCN1, B7x, B7s) is a ligand for inhibitory coreceptors on T cells implicated in antigenic tolerization. B7-H4 is expressed by tumor cells and tumor-associated macrophages (TAM), but its potential contributions to tumoral immune escape and therapeutic targeting have been less studied. To interrogate B7-H4 expression on tumor cells, we analyzed fresh primary ovarian cancer cells collected from patient ascites and solid tumors, and established cell lines before and after in vivo passaging. B7-H4 expression was detected on the surface of all fresh primary human tumors and tumor xenotransplants, but not on most established cell lines, and B7-H4 was lost rapidly by tumor xenograft cells after short-term in vitro culture. These results indicated an in vivo requirement for B7-H4 induction and defined conditions for targeting studies. To generate anti-B7-H4-targeting reagents, we isolated antibodies by differential cell screening of a yeast-display single-chain fragments variable (scFv) library derived from patients with ovarian cancer. We identified anti-B7-H4 scFv that reversed in vitro inhibition of CD3-stimulated T cells by B7-H4 protein. Notably, these reagents rescued tumor antigen-specific T-cell activation, which was otherwise inhibited by coculture with antigen-loaded B7-H4+ APCs, B7-H4+ tumor cells, or B7-H4- tumor cells mixed with B7-H4+ TAMs; peritoneal administration of anti-B7-H4 scFv delayed the growth of established tumors. Together, our findings showed that cell surface expression of B7-H4 occurs only in tumors in vivo and that antibody binding of B7-H4 could restore antitumor T-cell responses. We suggest that blocking of B7-H4/B7-H4 ligand interactions may represent a feasible therapeutic strategy for ovarian cancer.