Optimal stimulation and prevention of anergy in T cells requires signaling through the CD28 molecule. During HIV disease progression, CD28 expression is lost, particularly on CD8+ T cells. Because alterations in cytokine production patterns occur during HIV infection, we determined whether CD8+ T cell phenotype or function was affected by cytokine environment. Treatment of CD8+ T cells with IL-4 decreased levels of both CD28 surface expression and message and increased CD8 expression. Furthermore, CD8+ T cells that had down-regulated CD28 had reduced proliferative capacity. The inhibitory effects of CD28 reduction could be compensated either by increased anti-CD3 or by exogenous IL-2, suggesting that the strength of T cell signaling necessary for the production of IL-2 and subsequent proliferation is negatively regulated by IL-4. CD8+ subpopulations with differential CD28 expression produced different patterns of cytokines, particularly IL-2 and IFN-gamma. Furthermore, CD8+ T cells that had reduced CD28 levels but made their own IL-2 were able to proliferate in response to TCR stimulation. These results suggest that loss of CD28 expression and CD8 T cell function can be regulated by the cytokine environment, which may be altered during HIV disease progression. Whether the dysfunction of CD8+ T cells in HIV infection occurs by such a mechanism is the subject of future investigation.