The heat-stable antigen (HSA) is a costimulatory molecule for T-cell activation. Its expression is strictly regulated during lymphocyte development and differentiation. Recent studies using HSA-transgenic mice have demonstrated that this regulated expression is critical for normal development of T and B lymphocytes. However, the mechanisms that control the expression of HSA are largely unknown. HSA mRNA is comprised of a 0.23-kb open reading frame and a 1.5-kb 3' untranslated region (3'UTR). The function of the long 3'UTR has not been addressed. Here we investigate the role of the 3'UTR of HSA mRNA. We show that a 160-bp element, located in the region of nucleotides 1465 to 1625 in the 3'UTR of HSA mRNA, promotes RNA degradation and that this effect is neutralized by a 43-bp fragment approximately 1 kb upstream of the negative cis element. Both positive and negative cis elements in the HSA mRNA are distinct from other sequences that are known to modulate mRNA stability. These results provide direct evidence that the interplay between two novel cis elements in the 3'UTR of HSA mRNA determines cell surface HSA expression by modulating its RNA stability.