Development of mucosal immunity and tolerance requires coordinated expression of a number of genes within the mucosa-associated lymphoid tissue (MALT). To study the roles of these genes in the MALT, we have established a MALT-specific gene transfer model using replication-defective adenovirus as vector. In this model, the target gene of interest is directly delivered into the Peyer's patch by intra-Peyer's patch injection of the recombinant virus. Using this gene transfer model, we investigated the roles of B7-1 and IL-12 in the development of mucosal tolerance. We found that intra-Peyer's patch injection of OVA induced Ag-specific T cell hyporesponsiveness, as manifested by decreased T cell proliferation and IL-2/IFN-gamma production upon subsequent immune challenge. Intra-Peyer's patch B7-1 gene transfer at the time of OVA administration partially reversed the inhibition of T cell proliferation and IL-2 secretion, but had no effect on IFN-gamma production. By contrast, intra-Peyer's patch IL-12 gene transfer completely restored T cell proliferation and IFN-gamma secretion and partially reversed IL-2 inhibition. Using an adoptive TCR transgenic model, we further demonstrated that B7 and IL-12 played distinct roles during the inductive phase of mucosal tolerance. B7 selectively increased T cell proliferation and IL-2 secretion without affecting IFN-gamma production, whereas IL-12 increased both IL-2 and IFN-gamma production. These results indicate that B7 alone may not be sufficient to abrogate mucosal tolerance, and that cytokines such as IL-12 may also be required. Based on these findings, we propose a new model to explain the paradoxical roles of B7 in mucosal immunity and tolerance.