B7-H3, a novel B7 family member, positively or negatively regulates T-cell responses. We investigated the clinical relevance and prognostic significance of B7-H3 in hepatocellular carcinoma (HCC). Western blotting showed B7-H3 upregulation in 17 of 24 (70.8 %) HCC tissues compared with nontumor liver tissues (p = 0.028). B7-H3 immunostaining on tissue microarrays containing 240 HCC patient samples indicated that 225 (93.8 %) tumors had aberrant B7-H3 expression, with strong intensity in 79 (32.9 %) cases, whereas B7-H3 expression in peritumor liver cells was weak in most cases (226; 94.2 %). Notably, patients with high/moderate tumor cell B7-H3 expression showed significantly poorer survival (p = 0.009) and increased recurrence (p = 0.002). After multivariable adjustment, high/moderate B7-H3 expression remained significant for an increased risk of recurrence (hazard ratio = 1.79; 95 % confidence interval = 1.19-2.70; p = 0.005). B7-H3 expression correlated with invasive phenotypes like vascular invasion and advanced tumor stage, and the metastatic potential of HCC cell lines. Flow cytometry showed that B7-H3 expression is inversely correlated with proliferation and interferon-γ production by infiltrating T cells. Interferon-γ stimulation significantly upregulated B7-H3 expression in HCC cells in vitro, implicating B7-H3 expression as a feedback mechanism to evade anti-tumor immunity. Importantly, the prognostic value of B7-H3 expression was validated in an independent cohort of 206 HCC patients. Collectively, our data suggest that B7-H3 was abundantly expressed in HCC and was associated with adverse clinicopathologic features and poor outcome. Thus, B7-H3 represents an attractive target for diagnostic and therapeutic manipulation in human HCC.