Modulation of the maternal immune system by the placenta is a mechanism by which the fetus ensures its own survival in a genetically foreign environment. The immunoinhibitor CD274 (also called B7-H1 or PD-L1) is highly expressed in the placenta, positioned to interact with maternal leukocytes. Further, immunoblot analysis of first- and second-trimester placental lysates showed that CD274 expression is low in the first trimester but dramatically rises around the onset of the second trimester. As this coincides with the expected onset of maternal blood flow to the placenta and a corresponding rise in local oxygen tension, we explored the possibility that oxygen regulates CD274 expression in trophoblast cells by culturing term trophoblast cells under oxygen concentrations similar to those found in vivo. Indeed, CD274 protein levels paralleled the in vivo situation: expression increased with rising oxygen concentrations. Furthermore, downregulation of CD274 mRNA by low oxygen was rapid, occurring within 4–12 h. We conclude that oxygen is a potential mediator of CD274 expression in vivo such that it is induced coincidentally on exposure of fetal tissues to maternal blood. Further, the regulation of this immunomodulator by oxygen may implicate its alteration during and involvement in the pathogenesis of complications of pregnancy such as preeclampsia.