CTLA-4 is a CD28 homologue believed to be a negative regulator of T cell function. However, the mechanism of this downregulatory activity is not well understood. The present study was designed to examine the effect of CTLA-4 ligation on cytokine production, cell survival, and cell cycle progression. The results demonstrate that the primary effect of CTLA-4 ligation is not the induction of apoptosis. Instead, CTLA-4 signaling blocks IL-2 production, IL-2 receptor expression, and cell cycle progression of activated T cells. Moreover, the effect of CTLA-4 signaling was manifested after initial T cell activation. Inhibition of IL-2 receptor expression and cell cycle progression was more pronounced at late (72 h) time points after initial activation. The effects of anti-CTLA-4 mAbs were most apparent in the presence of optimal CD28-mediated costimulation consistent with the finding that CTLA-4 upregulation was CD28-dependent. Finally, the addition of exogenous IL-2 to the cultures restored IL-2 receptor expression and T cell proliferation. These results suggest that CTLA-4 signaling does not regulate cell survival or responsiveness to IL-2, but does inhibit CD28-dependent IL-2 production.