It is becoming increasingly clear that the control of self-reactivity involves peripheral mechanisms that supplement thymic negative selection. It is now generally accepted that T-cell activation depends upon both T-cell receptor engagement and the delivery of B7-mediated costimulation by specialized antigen presenting cells (APC). In contrast, failure to deliver B7-mediated costimulation can result in the induction of antigen-specific non-responsiveness. In physiological terms, costimulation-deficient antigen presentation is the prerogative of those cells that do not express B7 molecules, even during inflammatory conditions, such as tissue parenchymal cells. The consequences of such costimulation-deficient antigen presentation are illustrated by the allospecific tolerance that is observed in animal models of transplantation following the depletion of bone marrow-derived APC from an allograft. In this paper the possible role of antigen presentation by tissue parenchymal cells in the induction and maintenance of peripheral tolerance is discussed, with particular attention to the important contribution that the liver may make to these events.