Co-stimulatory factors E7-1 (CD80) and B7-2 (CD86) and their ligands, including CD28, are important for the efficient presentation and persistence of an antigen-specific immune reaction, Hitherto, there has been a paucity of data on the roles of such co-stimulatory factors in immune-mediated biliary diseases. In this investigation, the hepatic immunohistochemical expression of B7-1 and B7-2 has been studied, with emphasis on intrahepatic biliary epithelia, using wedge biopsies from 22 patients with primary biliary cirrhosis (PBC), seven with primary sclerosing cholagitis (PSC), and, as controls, eight cases of extrahepatic biliary obstruction, eight of chronic viral hepatitis C, and three histologically normal livers. In 10/22 (45 per cent) patients with PBC and 3/7 (43 per cent) patients with PSC, B7-2, but not B7-1, was expressed on the epithelial cells of small intrahepatic bile ducts and bile ductules. This expression was manifest as diffuse but variable cytoplasmic staining. Such B7-2-positive bile ducts were not seen in controls. Positive staining was found only in the early stage of PBC and PSC, In PBC and PSC, almost all lymphocytes in the portal tracts, including those around the damaged bile ducts, were positive for CD28, a ligand of B7-2, These results suggest that B7-2 expression on biliary epithelial cells is involved in antigen presentation and perhaps in bile duct destruction in PSC and PBC, (C) 1998 John Wiley & Sons, Ltd.