Recent advances in the understanding of T cell activation have led to new therapeutic approaches in the treatment of immunological disorders. One attractive target of intervention has been the blockade of T cell costimulatory pathways, which result in more selective effects on only those T cells that have encountered specific antigen. In fact, in some instances, costimulatory pathway antagonists can induce antigen-specific tolerance that prevents the progression of autoimmune diseases and organ graft rejection. In this review, we summarize the current understanding of these complex costimulatory pathways including the individual roles of the CD28, CTLA-4, B7-1 (CD80), and B7-2 (CD86) molecules. We present evidence that suggests that multiple mechanisms contribute to CD28/B7-mediated T cell costimulation in disease settings that include expansion of activated pathogenic T cells, differentiation of Th1/Th2 cells, and the migration of T cells into target tissues. Additionally, the negative regulatory role of CTLA-4 in autoimmune diseases and graft rejection supports a dynamic but complex process of immune regulation that is prominent in the control of self-reactivity. This is most apparent in regulation of the CD4⁺CD25⁺CTLA-4⁺ immunoregulatory T cells that control multiple autoimmune diseases. The implications of these complexities and the potential for use of these therapies in clinical immune intervention are discussed.