Costimulatory molecules, such as the programmed death ligand (PD-L1), might exert differential effects on T-cell function, depending on the clinical setting and/or immunological environment. Given the impact of T cells on bronchiolitis obliterans (BO) in lung transplantation, we used an established tracheal transplant model inducing BO-like lesions to investigate the impact of PD-L1 on alloimmune responses and histopathological outcome in BO. In contrast to other transplant models in which PD-L1 generally shows protective functions, we demonstrated that PD-L1 has divergent effects depending on its location in donor versus recipient tissue. Although PD-L1 deficiency in donor tissue worsened histopathological outcome, and increased systemic inflammatory response, recipient PD-L1 deficiency induced opposite effects. Mechanistic studies revealed PD-L1-deficient recipients were hyporesponsive toward alloantigen, despite increased numbers of CD8 effector T cells. The function of PD-L1 on T cells after unspecific stimulation was dependent on both cell type and strength of stimulation. This novel function of recipient PD-L1 may result from the high degree of T-cell activation within the highly immunogenic milieu of the transplanted tissue. In this model, both decreased T-cell alloimmune responses and the reduction of BO in PD-L1-deficient recipients suggest a potential therapeutic role of selectively blocking PD-L1 in the recipient. Further investigation is warranted to determine the impact of this finding embedded in the complex pathophysiological context of BO.