CD26 is T cell costimulatory molecule with dipeptidyl peptidase IV (DPPIV) enzyme activity located in its extracellular region. The expression of CD26 is enhanced after activation of T cells, while it is preferentially expressed on a subset of CD4+ memory T cells in the resting state. In this paper, we demonstrate that binding of the soluble anti-CD26 monoclonal antibody (mAb) 1F7 inhibits human T-cell growth and proliferation in both CD26-transfected Jurkat T-cell lines and human T-cell clones by inducing G1/S arrest, which is associated with enhancement of p21Cip1 expression. This effect depends on the DPPIV enzyme activity of the CD26 molecule. Moreover, we show that expression of p21Cip1 after treatment with the anti-CD26 mAb 1F7 appears to be induced through activation of extracellular signal-regulated kinase (ERK) pathway. These data thus suggest that anti-CD26 treatment may have potential use in the clinical setting involving activated T cell dysregulation, including autoimmune disorders and graft-vs.-host disease.