CD26 is a proteolytic enzyme (dipeptidyl-peptidase IV) with a wide tissue distribution and a unique specificity that was already described 27 years ago. CD26 is expressed on a fraction of resting T cells at low density but is strongly upregulated following T-cell activation. Recent results indicate that CD26 is a multifunctional molecule that may have important functions on T cells and in the immune system. It is associated with molecules of immunological importance such as the protein tyrosine phosphatase CD45 and adenosine deaminase (ADA) on the cell surface. Synthetic inhibitors of the enzymatic activity of CD26 have been shown to suppress certain immune reactions in vitro and in vivo. An interesting feature of CD26 is its ability to transmit a transmembrane signal to trigger functional programs in T cells. This triggering requires crosslinking of CD26 on a cell membrane. The enzymatic activity of CD26 is not obligatory for the activation of T cells via CD26. Since CD26 is a type II membrane protein with only six intracellular amino acids, it must deliver its signal via a signal-transducing molecule. Signaling is dependent on the expression of the T-cell receptor (TCR) complex with a special need for a functional zeta-chain. In this context the zeta-chain of the TCR complex is required for CD26-mediated signaling but, in contrast to other co-stimulatory molecules such as the CD2 molecule, is not sufficient for triggering the T cell.