The CD28/CTLA-4 and B7 families of cell surface molecules regulate a complex pathway of T cell signals that profoundly affect peripheral T cell responses. On the one hand, CD28/B7-mediated T cell costimulation is essential for the development and maintenance of T cell responses. In contrast, the prevailing data suggest that the engagement of CTLA-4 with the same B7 ligands down-regulates the initiation and progression of immune responses. This commentary examines the role of CTLA-4-mediated signaling in the regulation of the immune response, leading to the hypothesis that the CTLA-4/B7 interaction plays an essential role in the establishment of peripheral self-tolerance as well as the regulation of normal T cell immunity.