Interactions between the costimulatory molecule B7 on APC and its counter-receptor CD28 on T lymphocytes play a key role in the induction of cell-mediated immune responses. We studied the role of costimulation of tumor-reactive T cells by B7 in the immune destruction of the K1735-M2 mouse melanoma into which the gene encoding the human melanoma-associated Ag, p97, had been transfected. Previous work has demonstrated that the p97 transfectant cl62 is immunogenic but still grows progressively in immunocompetent C3H/HeN mice and that adoptive transfer of p97-specific CD4+ T cells can induce the regression of small established cl62 tumors metastatic to the lungs. We have now shown that expression of B7 in cl62 after retroviral-mediated gene transfer eliminated its ability to grow in immunocompetent mice but not in T cell-deficient nude mice. Mice immunized with B7-transduced p97+ cells had an increased activity of both CD4+ T cells, which could proliferate in response to the p97 Ag, and CD8+ CTL, which could lyse a broad spectrum of cultured syngeneic p97+ and p97- tumor lines but not allogeneic tumor lines or syngeneic lymphoblasts. Both CD4+ and CD8+ T cell subsets were required for tumor rejection, and the depletion of CD4+ T cells in vivo decreased the tumoricidal activity of CD8+ CTL. Treatment of mice bearing an 8-day established s.c. cl62 melanoma by i.p. injection of B7+ cells from 2A, a highly immunogenic p97 transfectant, resulted in complete tumor regression and cure, injection of B7- 2A cells did not. The therapeutic effect was specific for the cl62 tumor. Our results demonstrate that costimulation by B7 can amplify both CD4+ and CD8+ T cell responses against small tumors toward therapeutic benefit.