CD40 is a membrane differentiation antigen constitutively expressed on B cells that induces B cell growth and Ig synthesis after ligation with anti-CD40 mAb or with the recently identified CD40 ligand (CD40L). CD40L is rapidly induced on T cells after activation with anti-CD3 mAb or mitogens. While CD40-CD40L interactions are clearly beneficial to B cells, we speculated that a reciprocal costimulation of T cells might also occur. We have used genetic transfection to demonstrate that interactions between human small, resting T cells and CD40+ murine transfectants substantially augmented anti-CD3 induced T cell proliferation and resulted in the generation of CTL. T cell proliferation costimulated by CD40 was IL-2 dependent. The ability of CD40+ transfectants to costimulate T cell proliferation was specific in that VCAM-1+, CD54+, CD72+, CD56+, CD31+, and fas+ transfectants in the same host cells were inactive. CD4+ T cells preferentially responded to CD40 costimulation, whereas CD8+ T cells were substantially less reactive. By contrast, costimulation with B7 transfectants induced equivalent proliferation in the CD4+ and CD8+ T cell subsets. In addition, adult naive and memory T cells, as well as cord blood T cells, were responsive to CD40. These findings suggest that the CD40-CD40L costimulation pathway may allow for selective expansion of CD4+ T cells after interaction with CD40-bearing APC. The relatively restricted expression of CD40 on APC, as well as on medullary and cortical thymic epithelium, indicates a possible role for this interaction in T cell differentiation and activation.