The past year has seen significant advances in our understanding of the role of the B7-CD28/CTLA-4 pathway in regulating the responses of self-reactive T cells, giving impetus to manipulation of this pathway for treating human autoimmune diseases. Recent studies have demonstrated that B7-CD28 costimulation has critical roles in stimulating both the initiation and effector phases of autoimmunity and that CD28 regulates the threshold for activation of self-reactive T cells. Recent work has also revealed critical roles for CTLA-4 in limiting the extent of Th1/Th2 cell differentiation and in downregulating the responses of self-reactive T cells during both the initiation and progression of autoimmune disease.