Following occupancy of the T cell receptor by antigen, T cell proliferation and lymphokine production are determined by a second costimulatory signal delivered by a ligand expressed on antigen presenting cells. The human B cell activation antigen B7, which is expressed on antigen presenting cells including activated B cells and gamma interferon treated monocytes, has been shown to deliver such a costimulatory signal upon attachment to its ligand on T cells, CD28. We have cloned and sequenced the murine homologue of the human B7 gene. The predicted murine protein has 44% amino acid identity with human B7. The greatest similarity is in the Ig-V and Ig-C like domains. Murine B7 mRNA was detected in murine hematopoietic cells of B cell but not T cell origin. Cells transfected with murine B7 provided a costimulatory signal to human CD28+ T lymphocytes. These results demonstrate the costimulatory activity of murine B7 and provide evidence that the ligand attachment site is conserved between the two species.