Two bispecific recombinant molecules, an anti-CD3 x anti-carcinoembryogenic antigen (CEA) diabody and a B7 x anti-CEA fusion protein, were tested for their capacity to specifically activate T cells in the presence of CEA-expressing colon carcinoma cells. T-cell activation by the anti-CD3 x anti-CEA diabody required close contact to CEA-positive cells and resulted in diabody-mediated cytotoxicity against the target cells. Additionally, CD28-mediated costimulation in combination with anti-CD3 x anti-CEA diabodies induced activation of autologous T cells in CEA-positive primary colon carcinoma specimens, as determined by flow cytometry. The high specificity of the bispecific diabody approach could be further enhanced by the use of B7 x anti-CEA fusion proteins because the costimulatory CD28-signaling to the T cells strictly depended on the expression of CEA on the target cells. We demonstrate that displaying engagement sites for the T-cell antigens CD3 and CD28 on the surface of colon carcinoma cells is a suitable way to activate and retarget T cells in a highly tumor-specific manner. For clinical purposes, B7 x anti-tumor-associated antigen (TAA) fusion proteins, which are equally effective but more specific compared with anti-CD28 monoclonal anti-bodies, thus may improve the tumor specificity of anti-CD3 x anti-TAA bispecific antibodies. Furthermore, B7-negative tumors can be converted into B7-positive tumors by B7 x anti-TAA fusion proteins without the need for B7 gene transfer to the malignant cells.