Programmed death-1 (PD-1) is an immunoreceptor tyrosine-based inhibitory motif (ITIM)-containing receptor expressed upon T cell activation. PD-1(-/-) animals develop autoimmune diseases, suggesting an inhibitory role for PD-1 in immune responses. Members of the B7 family, PD-L1 and PD-L2, are ligands for PD-1. This study examines the functional consequences of PD-1:PD-L engagement on murine CD4 and CD8 T cells and shows that these interactions result in inhibition of proliferation and cytokine production. T cells stimulated with anti-CD3/PD-L1.Fc-coated beads display dramatically decreased proliferation and IL-2 production, while CSFE analysis shows fewer cells cycling and a slower division rate. Costimulation with soluble anti-CD28 mAb can overcome PD-1-mediated inhibition by augmenting IL-2 production. However, PD-1:PD-L interactions inhibit IL-2 production even in the presence of costimulation and, thus, after prolonged activation, the PD-1:PD-L inhibitory pathway dominates. Exogenous IL-2 is able to overcome PD-L1-mediated inhibition at all times, indicating that cells maintain IL-2 responsiveness. Experiments using TCR transgenic CD4(+) or CD8(+) T cells stimulated with antigen-presenting cells expressing PD-L1 show that both T cell subsets are susceptible to this inhibitory pathway. However, CD8(+) T cells may be more sensitive to modulation by the PD-1:PD-L pathway because of their intrinsic inability to produce significant levels of IL-2.