Summary: Positive and negative costimulation by members of the CD28 family is critical for the development of productive immune responses against foreign pathogens and their proper termination to prevent inflammation-induced tissue damage. In addition, costimulatory signals are critical for the establishment and maintenance of peripheral tolerance. This paradigm has been established in many animal models and has led to the development of immunotherapies targeting costimulation pathways for the treatment of cancer, autoimmune disease, and allograft rejection. During the last decade, the complexity of the biology of costimulatory pathways has greatly increased due to the realization that costimulation does not affect only effector T cells but also influences regulatory T cells and antigen-presenting cells. Thus, costimulation controls T-cell tolerance through both intrinsic and extrinsic pathways. In this review, we discuss the influence of costimulation on intrinsic and extrinsic pathways of peripheral tolerance, with emphasis on members of the CD28 family, CD28, cytotoxic T-lymphocyte antigen-4 (CTLA-4), and programmed death-1 (PD-1), as well as the downstream cytokine interleukin-1 (IL-2).