B7-CD28 costimulation is essential for the activation of CD4+ T helper cells, mainly by regulating IL-2 and other cytokine production. The requirement for this costimulatory pathway in the activation of CD8+ T cells, however, is still poorly understood. Here we analyzed the role of B7-CD28 costimulation in the differentiation of Ag-specific CTL precursor. We found that the activation of not only IL-2 production but also cytotoxic function in CD8 T cells requires B7 costimulation. The costimulatory signal, which cannot be replaced by exogenous IL-2, is directly implicated in the activation of the lytic machinery in CD8 T cells. Moreover, B7-CD28 costimulation appears to play a critical role in the accumulation of mRNA encoding at least one of the granzymes required for cytolytic function, granzyme B or CTLA-1. The production of IFN-gamma by CD8 T cells, however, does not appear to require costimulation.