In the presence of TCR ligation by Ag, CD28 pathway mediates the most potent costimulatory signal for T cell activation, cytokine secretion, and T cell expansion. Although CD28 costimulation promotes T cell expansion due to IL-2 secretion and subsequent signaling via the IL-2 receptor, recent studies indicate that the dramatic T cell expansion mediated through the unopposed CD28 stimulation in CTLA4-deficient mice is IL-2 independent. Therefore, we sought to dissect the effects of CD28 and IL-2 receptor pathways on cell cycle progression and determine the molecular mechanisms by which the CD28 pathway regulates T cell expansion. Here we show that CD28 costimulation directly regulates T cell cycle entry and progression through the G 1 phase in an IL-2-independent manner resulting in activation of cyclin D2-associated cdk4/cdk6 and cyclin E-associated cdk2. Subsequent progression into the S phase is mediated via both IL-2-dependent and IL-2-independent mechanisms and, although in the absence of IL-2 the majority of T cells are arrested at the G 1/S transition, a significant fraction of them progresses into the S phase. The key regulatory mechanism for the activation of cyclin-cdk complexes and cell cycle progression is the down-regulation of p27 kip1 cdk inhibitor, which is mediated at the posttranscriptional level by its ubiquitin-dependent degradation in the proteasome pathway. Therefore, CD28 costimulation mediates T cell expansion in an IL-2-independent and IL-2 dependent manner and regulates cell cycle progression at two distinct points: at the early G 1 phase and at the G 1/S transition.