Programmed cell death ligand 2 (PD-L2), a ligand for the receptor programmed cell death 1 (PD-1), has an identity of 34% with its twin ligand PD-L1 and exhibits higher binding affinity with PD-1 than PD-L1. However, the role of PD-L2 in non-small cell lung cancer (NSCLC) progression, especially tobacco-induced cancer progression, has not been fully understood. Here, we found that PD-L2 promoted tumor growth in murine models with recruitment of regulatory T cells (Tregs). In patients with NSCLC, PD-L2 expression level in tumor samples was higher than in counterpart normal controls and was positively associated with patients' response to anti-PD-1 treatment. Mechanismly, PD-L2 bound its receptor Repulsive guidance molecule B (RGMB) on cancer cells and activated extracellular signal-regulated kinase (Erk) and nuclear factor κB (NFκB), leading to increased production of chemokine CCL20, which recruited Tregs and contributed to NSCLC progression. Consistently, knockdown of RGMB or NFκB p65 inhibited PD-L2-induced CCL20 production, and silencing of PD-L2 repressed Treg recruitment by NSCLC cells. Furthermore, cigarette smoke and carcinogen benzo(a)pyrene (BaP) upregulated PD-L2 in lung epithelial cells via aryl hydrocarbon receptor (AhR)-mediated transcription activation, whose deficiency markedly suppressed BaP-induced PD-L2 upregulation. These results suggest that PD-L2 mediates tobacco-induced recruitment of Tregs via the RGMB/NFκB/CCL20 cascade, and targeting this pathway might have therapeutic potentials in NSCLC.