Identifying the mechanisms underlying the regulation of immune checkpoint molecules and the therapeutic impact of targeting them in cancer is critical. Here we show that high expression of the immune checkpoint B7-H3 (CD276) and high mTORC1 activity correlate with immunosuppressive phenotypes and worse clinical outcomes in 11,060 TCGA human tumors. We find that mTORC1 upregulates B7-H3 expression via direct phosphorylation of the transcription factor YY2 by p70 S6 kinase. Inhibition of B7-H3 suppresses mTORC1-hyperactive tumor growth via an immune-mediated mechanism involving increased T-cell activity and IFN-γ responses coupled with increased tumor cell expression of MHC-II. CITE-seq reveals strikingly increased cytotoxic CD38+CD39+CD4+ T cells in B7-H3-deficient tumors. In pan-human cancers, a high cytotoxic CD38+CD39+CD4+ T-cell gene signature correlates with better clinical prognosis. These results show that mTORC1-hyperactivity, present in many human tumors including tuberous sclerosis complex (TSC) and lymphangioleiomyomatosis (LAM), drives B7-H3 expression leading to suppression of cytotoxic CD4+ T cells.