The invention identifies PD-1 as a receptor for B7-4. B7-4 can inhibit immune cell activation upon binding to an inhibitory receptor on an immune cell. Accordingly, the invention provides agents for modulating PD-1, B7-4, and the interaction between B7-4 and PD-1 in order to modulate a costimulatory or an inhibitory signal in a immune cell resulting in modulation of the immune response.