Presentation of antigen to the T-cell receptor (TCR) without co-stimulation results in a state of antigen-specific unresponsiveness on rechallenge, known as anergy in vitro and tolerance in vivo. Mounting evidence suggests that inhibition of the B7-CD28 co-stimulatory pathway is both necessary and sufficient to induce antigen-specific T-cell anergy. Anergy is not static because specific signals are required to maintain this state and prevent its reversal. Attention to these issues will be critical to translate these basic studies to the clinical arenas of transplantation, tumor immunity and autoimmunity.