The role of nonclassical monocytes (NCMs) in health and disease is emerging, but their location and function within tissues remain poorly explored. Imaging of NCMs has been limited by the lack of an established single NCM marker. Here, we characterize the immune checkpoint molecule PD-L1 (CD274) as an unequivocal marker for tracking NCMs in circulation and pinpoint their compartmentalized distribution in tissues by two-photon microscopy. Visualization of PD-L1(+) NCMs in relation to bone marrow vasculature reveals that conversion of classical monocytes into NCMs requires contact with endosteal vessels. Furthermore, PD-L1(+) NCMs are present in tertiary lymphoid organs (TLOs) under inflammatory conditions in both mice and humans, and NCMs exhibit a PD-L1-dependent immunomodulatory function that promotes T cell apoptosis within TLOs. Our findings establish an unambiguous tool for the investigation of NCMs and shed light on their origin and function.