There is considerable evidence to support an important role for co-stimulatory molecules in regulating the proliferation and activation of T cells in the immune response. Of particular relevance is the interaction between CD28 on T cells and B7 expressed on the surface of antigen presenting cells (APCs). CTLA-4, another molecule present on activated T cells may downregulate T cell activity, but its role remains uncertain. CTLA4-Ig, a fusion protein consisting of the extracellular domain of CTLA4 and the Fc portion of human immunoglobulin G1 (IgG1), has been useful for studying the role of CD28/B7 interactions in immune responses. A number of studies have shown that CTLA4-Ig can switch off T cell activation. In an ovalbumin sensitive murine model of asthma, CTLA4-Ig treatment suppressed the response to inhaled allergen (increased airway hyperresponsiveness [AHR], IgE production, recruitment of eosinophils into the lungs, production of IL-4, IL-5, and IL-10 and increased IFNγ production from CD3-TCR-activated T cells). Anti B7–2 treatment has similar effects suggesting that interaction of B7–2 with CD28 is important in the development of a Th-2 type inflammatory response in mice. Recent observations have been of relevance to human allergic disease. In vitro studies have shown that CTLA4-Ig or anti-B7–2 antibody can inhibit allergen-induced proliferation and cytokine production by peripheral blood mononuclear cells from atopic subjects. The role of co-stimulation has been studied in a human bronchial explant model of asthma. CTLA4-Ig fusion protein effectively blocked allergen-induced production of IL-5 and IL-13 in bronchial explants from atopic asthmatics. These studies confirm the requirement for interaction between co-stimulatory molecules in cytokine production and allergic inflammation, and point to the CD28-B7 pathway as being important to the allergen-induced inflammation in asthma. Studies of organ transplantation in primates suggest that CTLA4-Ig is extremely effective in preventing organ rejection. While phase 1 clinical trials have shown CTLA-4-Ig treatment of patients with psoriasis vulgaris to be well tolerated and to result in clinical improvement, its role in asthma management merits further investigation.