The importance of the B7/CD28/CTLA-4 molecules has been established in studies of antigen-presenting cell-derived B7 and its interaction with the T cell costimulatory molecule CD28. CTLA-4, a T cell surface glycoprotein that is related to CD28, can also interact with B7-1 and B7-2. However, less is known about the function of CTLA-4, which is expressed at highest levels after activation. We have generated an antibody to CTLA-4 to investigate the consequences of engagement of this molecule in a carefully defined system using highly purified T cells. We show here that the presence of low levels of B7-2 on freshly explanted T cells can partially inhibit T cell proliferation, and this inhibition is mediated by interactions with CTLA-4. Cross-linking of CTLA-4 together with the TCR and CD28 strongly inhibits proliferation and IL-2 secretion by T cells. Finally, results show that CD28 and CTLA-4 deliver opposing signals that appear to be integrated by the T cell in determining the response to activation. These data strongly suggest that the outcome of T cell antigen receptor stimulation is regulated by CD28 costimulatory signals, as well as inhibitory signals derived from CTLA-4.