Activation-induced cell surface molecules are involved in mediating bidirectional T-B lymphocyte signaling that is important in the induction of T or B lymphocyte effector functions. In this regard, T-BAM/CD40-L is an activation-induced CD4+ T cell surface molecule known to be important in inducing B cell effector functions. This report demonstrates that T-BAM/CD40-L molecules on a Jurkat T cell leukemia subclone (D1.1) or nonlymphoid 293 kidney cell transfectants induce B cells or B-CLL cells to express CD80 (B7/BB-1) in a manner that is specifically inhibited by anti-T-BAM/CD40-L mAb 5C8. Because activation-induced B cell surface molecules, such as CD80, deliver costimulatory signals to T cells that augment T cell proliferation, the functional costimulatory capacity of T-BAM/CD40-L-primed B cells and B-CLL cells was studied. T-BAM/CD40-L-primed B cells or B-CLL cells augment the proliferative responses of allogenic T cells. Furthermore, T-BAM/CD40-L priming is specifically inhibited by mAb 5C8. Together, these studies demonstrate that T-BAM/CD40-L induces CD80 expression on resting B cells or B-CLL cells. Moreover, T-BAM/CD40-L signaling enhances B cell costimulatory capacity. These studies suggest that T-BAM/CD40-L molecules not only induce B cell differentiative processes that result in Ab secretion, but also enable B cells to prime Ag-specific T cells for subsequent clonal expansion.