Stimulation of CD27, a member of the tumour necrosis factor receptor family, by its ligand CD70 induces expansion of IFNγ secreting CD4⁺ and CD8⁺ T cells in vivo. We here analysed the mechanisms through which CD27 mediates this effect. CD27 co-stimulation induced cell division but did not directly instruct naive CD4⁺ T cells to differentiate into IFNγ-producing T_h1 cells. Rather, in concert with signals delivered through the TCR–CD3 complex, CD27 co-stimulation enhanced the T_h1-specific transcription factor T-bet and caused up-regulation of the IL-12Rbeta2 chain. Consequently, CD27-costimulated T cells yielded vast numbers of IFNγ-secreting cells in response to IL-12. Additionally, CD27 ligation induced a strong up-regulation of Bcl-x_L, but not of related anti-apoptotic molecules_. Thus, CD27–CD70 interactions may promote T_h1 formation by permitting naive T cells to respond to differentiation signals and by promoting survival of activated effector T cells.