Multiple myeloma (MM) cells inhibit certain T-cell functions. We examined the expression of B7-H1 (PD-L1), a B7-related protein that inhibits T-cell responses, in CD138-purified plasma cells isolated from MM patients, monoclonal gammopathy of undetermined significance patients, and healthy donors. We observed that B7-H1 was expressed in most MM plasma cells, but not cells isolated from monoclonal gammopathy of undetermined significance or healthy donors. This expression was increased or induced by IFN-γ and Toll-like receptor (TLR) ligands in isolated MM plasma cells. Blocking the MEK/ERK pathway inhibited IFN-γ–mediated and TLR-mediated expression of B7-H1. Inhibition of the MyD88 and TRAF6 adaptor proteins of the TLR pathway blocked not only B7-H1 expression induced by TLR ligands but also that mediated by IFN-γ. IFN-γ–induced STAT1 activation, via MEK/ERK and MyD88/TRAF6, and inhibition of STAT1 reduced B7-H1 expression. MM plasma cells stimulated with IFN-γ or TLR ligands inhibited cytotoxic T lymphocytes (CTLs) generation and this immunosuppressive effect was inhibited by preincubation with an anti-B7-H1 antibody, the UO126 MEK inhibitor, or by transfection of a dominant-negative mutant of MyD88. Thus, B7-H1 expression by MM cells represents a possible immune escape mechanism that could be targeted therapeutically through inhibition of MyD88/TRAF6 and MEK/ERK/STAT1.