T cell activation requires the engagement of the TCR as well as a second, costimulatory signal. In this study, we demonstrate that MRC OX-2 (OX-2) mediates a previously unrecognized T cell costimulatory signal leading to enhanced T cell proliferation. One extensively studied costimulatory pathway, the B7/CD28 pathway, delivers its signal when CD28 is engaged by either of two ligands, B7-1 or B7-2, expressed on APC. Recent data have suggested that an additional ligand may exist in this pathway. This possibility prompted us to search previously cloned genes with both structural and expression characteristics similar to B7-1 and B7-2. Our search yielded OX-2, a rat lymphocyte activation marker, as a promising candidate gene. We now report that Chinese hamster ovary cell transfectants expressing the OX-2 protein can costimulate murine CD4+ T cells to proliferate in an Ag-independent fashion using anti-CD3, as well as an Ag-dependent fashion using peptide. In contrast to B7-1-mediated costimulation, OX-2 does not result in detectable levels of IL-2, IL-4, or IFN-gamma. In addition, OX-2 transfectants do not bind the soluble receptor reagents of the B7/CD28 pathway (CD28-Ig and CTLA4Ig). Furthermore, OX-2 costimulation is not inhibited by CTLA4Ig, as is B7-1-mediated costimulation, but is readily inhibited with an anti-OX-2 mAb. Thus, OX-2 is a T cell costimulatory ligand that acts through a non-B7/CD28 pathway, which leads to functionally distinct consequences, as reflected by the resulting cytokine profile.