CD28 is a cell surface glycoprotein expressed on T cells that modulates immune responses through its ability to transduce costimulatory signals. Even though nearly 50% of the molecular mass of CD28 is N-glycan, the physiological significance of CD28 glycosylation is at present unknown. In this report, we have investigated the function of hypoglycosylated wildtype CD28 and its splice variant, CD28i. When N-glycosylation was prevented through point mutations in N-glycosylation sites in CD28, or reduced by glycosidase inhibitors, the binding of CD28 to CD80 significantly increased. Stimulation of hypoglycosylated CD28 induced IL-2 promoter activity greater than that induced through the stimulation of wildtype CD28. Unlike hypoglycosylated wildtype CD28, hypoglycosylation of CD28i did not alter CD28i functions. Our data indicate that N-glycans of CD28 negatively regulate CD28/CD80 interactions, resulting in diminished CD28 signaling. It is also suggested that N-glycans regulate the density of CD28 clustering upon ligation with CD80/CD86. The results support the hypothesis that the N-glycosylation negatively regulates CD28-mediated T cell adhesion and costimulation.