Cytotoxic T-lymphocyte antigen-4 (CTLA-4; CD152) is a member of the immunoglobulin gene superfamily with strong homology to the receptor CD28 with which it shares the ligands CD80 and CD86. Unlike CD28, a potent costimulator of T-cell responses, CTLA-4 is transiently expressed on the cell surface of activated T cells and appears to operate predominantly as a negative regulator of T-cell proliferation. Signal transduction mechanisms utilized by CTLA-4 remain unclear although several mechanisms have been implicated. In this study, we show that the cytoplasmic domain of CTLA-4, but not of CD28, binds to STAT5 in yeast two-hybrid assay and in coimmunoprecipitation assays. Mutations of Tyr165 and Tyr182 in CTLA-4 did not abrogate the interaction of STAT5 with CTLA-4. Finally, the overexpression of CTLA-4 in Jurkat T cells inhibits STAT-mediated activation of STAT5 responsive elements. These results suggest that CTLA-4 and STAT5 interact in T cells and that this interaction is important for CTLA-4 signalling.