We constructed recombinant vaccinia viruses (recVV) encoding the human T-cell costimulatory molecules B7-1 and B7-2. To abrogate the vaccinia virus transcription termination signal for early genes, the cDNA of B7-1 had to be modified by a T through C sense mutation at position 766. Upon infection with replication incompetent and noncytopathic recVV, several tumor cell lines as well as cultured human fibroblasts expressed the costimulatory molecules. All these cells were capable of providing effective costimulation for proliferation of resting CD4(+) T-cells after infection with recVV encoding B7 molecules. The costimulatory effect could be blocked with CTLA-4 IgG fusion protein, the soluble ligand for B7. RecVV-induced overexpression of B7 on syngeneic EBV-transformed lymphoblastoid B-cells was able to costimulate the proliferative response of CD4(+) memory cells against VV antigens. The possibility of easily engineering a variety of human cells using recVV encoding human B7 molecules holds implications for the future design of vaccination strategies.