Costimulatory activity on antigen-presenting cells is a critical determinant of the fate T cells when the T cell receptors are engaged by MHC:peptide complexes. Therefore, control of the expression of the costimulatory molecules regulates T cell responses. While several types of interactions between T cells and B cells up-regulate costimulatory molecules on antigen-presenting cell, no T cell surface molecules have been implicated in inhibiting the induction of the costimulatory molecules on B cells. Here we characterize a new anti-Thy1 mAb, 21F10, which inhibits T cell proliferation to selective stimuli. T cells stimulated by anti-CD3 together with anti-Thy1 mAb are anergic to further stimulation through the CD3, which suggests that the anti-Thy1 mAb interferes with the delivery of the costimulatory activity to T cells. Consistent with this notion, anti-Thy1 mAb 21F10 completely inhibits the induction of B7-2 on B cells. Induction of several T cell surface molecules such as CD69 and CD40 ligand was largely unaffected. As this inhibition requires a bivalent anti-Thy1 mAb and does not require binding of more than 50% of Thy1 molecules on T cell surface, we suggest that Thy1 may mediate a negative signaling pathway which inhibits the T-cell-mediated induction of costimulatory activity, including expression of co-stimulatory molecule B7-2.