Antigen-specific T cell activation requires two independent signalling events, one mediated through T cell receptor engagement by the antigen-presenting cell-expressed peptide/class II major histocompatibility complex, and the second through the cognate interactions of costimulatory molecules expressed on the T cell and antigen-presenting cell. There is evidence from in vitro and in vivo experimental systems suggesting that the CD28/B7 costimulatory pathway is crucial for induction of maximal T cell proliferation and T helper-B cell collaboration for IgG production. This pathway can be blocked by CTLA-4-Ig, a soluble form of CTLA-4 which binds with high avidity to the CD28 ligands, B7-1 and B7-2. Here, we show that CTLA-4-Ig treatment prevents clinical and histological manifestations of disease in a collagen-induced arthritis model of rheumatoid arthritis in the diabetes resistant BB/Wor rat, when therapy is initiated before immunization with bovine type II collagen (BIIC). Anti-BIIC antibody titers are reduced in CTLA-4-Ig-treated rats compared to diseased control animals. Histologically, joints from CTLA-4-Ig-treated animals show no histological abnormalities, in contrast to control antibody-treated animals, which show complete erosion of the articular cartilage and bone. Despite the efficacy of CTLA-4-Ig in preventing clinical and histological signs of arthritis and reducing antibody responses to BIIC, delayed type hypersensitivity responses to collagen 18 d or more after CTLA-4-Ig treatment ends are similar in CTLA-4-Ig-treated and untreated rats, suggesting that the prolonged disease suppression observed does not result from induction of T cell anergy.