Cytotoxic T lymphocyte antigen 4 (CTLA-4 or CD152) is a strong negative regulator of T cell activity. Like CD28 (a positive regulator) it binds to B7-1 and B7-2, and there is no known natural selective ligand. Monoclonal antibodies to CTLA-4 generally have a masking effect, enhancing rather than suppressing responses. However, a single amino acid substitution in B7-1 (W88 > A; denoted B7-1wa) abrogates binding to CD28 but not to CTLA-4. We constructed plasmids encoding B7-1 or B7-1wa, as cell-surface or Ig fusion proteins. In a bound state, B7-1-Ig enhanced CD3-mediated T cell activation, but B7-1wa-Ig was inhibitory, as expected of a CTLA-4 ligand. To alter immunity in vivo, we inoculated mice intramuscularly (i.m.) with a carcinoembryonic antigen (CEA) plasmid. Gene transfer was amplified by electroporation. Co-injection of a B7-1wa (membrane-bound form) plasmid blocked induction of anti-CEA immunity, whereas a B7-1 plasmid was stimulatory. We studied this DNA covaccination method in nonobese diabetic (NOD) mice with autoimmune diabetes. Delivery of either preproinsulin I (PPIns) or B7-1wa cDNA alone did not suppress the autoimmune anti-insulin response of spleen cells. However, co-delivery of B7-1wa and PPIns cDNA abrogated reactivity to insulin and ameliorated disease. Interferon-gamma and interleukin-4 were both depressed, arguing against a Th2 bias. Reactivity to glutamic acid decarboxylase 65, another major islet autoantigen, was not altered and suppressor cells were not identified, suggesting induction of tolerance to insulin by either T cell anergy or deletion. Selective engagement of CTLA-4 through gene transfer represents a novel and powerful way to block autoimmunity specifically.