T-cell activation requires co-stimulation through receptors such as CD28 (refs ,,) and antigen-specific signalling through the T-cell antigen receptor. Here we describe a new murine co-stimulatory receptor–ligand pair. The receptor, which is related to CD28 and is the homologue of the human protein ICOS, is expressed on activated T cells and resting memory T cells. The ligand, which has homology to B7 molecules and is called B7-related protein-1 (B7RP-1), is expressed on B cells and macrophages. ICOS and B7RP-1 do not interact with proteins in the CD28–B7 pathway, and B7RP-1 co-stimulates T cells in vitro independently of CD28. Transgenic mice expressing a B7RP-1–Fc fusion protein show lymphoid hyperplasia in the spleen, lymph nodes and Peyer's patches. Presensitized mice treated with B7RP-1–Fc during antigen challenge show enhanced hypersensitivity. Therefore, B7RP-1 exhibits co-stimulatory activities in vitro and in vivo. ICOS and B7RP-1 define a new and distinct receptor–ligand pair that is structurally related to CD28–B7 and is involved in the adaptive immune response.