CD28 is required for the development of regulatory T cells (Tregs; CD4(+)CD25(+)Foxp3(+)) in the thymus and also contributes to their survival and homeostasis in the periphery. We studied whether and how CD28 and ICOS control the differentiation of Tregs from naive T cells. By using wild-type, CD28-, ICOS-, or CD28/ICOS-double knockout mice on C57BL/6 background as T cell sources, we found that CD28 is essential, whereas ICOS is dispensable, for the development and homeostasis of Tregs. Furthermore, the differentiation of Tregs from naive CD4(+)CD25(-) T cells in vivo also depends on CD28. The requirement of CD28 for Treg differentiation was mediated by IL-2, because neutralization of IL-2 with its specific mAb-blocked Treg differentiation from wild-type CD4(+)CD25(-) T cells and addition of IL-2 restored Treg differentiation from CD28(-/-) T cells. Other common gamma-chain cytokines, IL-4, IL-7, or IL-15, do not share such a role with IL-2. Although CD28 is required for the differentiation of Tregs from naive T cells, already generated Tregs do not depend on CD28 to exert their suppressive function. Our study reveals a new aspect of CD28 function in regulating T cell response.