CD28 and the related molecule cytotoxic T lymphocyte-associated molecule-4 (CTLA-4), together with their natural ligands B7.1 and B7.2, have been implicated in the differential regulation of several immune responses. CD28 provides signals during T cell activation which are required for the production of interleukin 2 and other cytokines and chemokines, and it has also been implicated in the regulation of T cell anergy and programmed T cell death. The biochemical signals provided by CD28 are cyclosporin A-resistant and complement those provided by the T cell antigen receptor to allow full activation of T cells. Multiple signalling cascades which may be independent of, or dependent on, protein tyrosine kinase activation have been demonstrated to be activated by CD28, including activation of phospholipase C, p21ran, phosphoinositide 3-kinase, sphingomyelinase/ceramide and 5-lipoxygenase. The relative contributions of these cascades to overall CD28 signalling are still unknown, but probably depend on the state of activation of the T cell and the level of CD28 activation. The importance of these signalling cascades (in particular the phosphoinositide 3-kinase-mediated cascade) to functional indications of CD28 activation, such as interleukin 2 gene regulation, has been investigated using pharmacological and genetic manipulations. These approaches have demonstrated that CD28-activated signalling cascades regulate several transcription factors involved in interleukin 2 transcriptional activation. This review describes in detail the structure and expression of the CD28 and B7 families, the functional outcomes of CD28 ligation and the signalling events that are thought to mediate these functions.