CD28 is an adhesion receptor expressed as a 44-kD dimer on the surface of a major subset of human T cells. The CD28 receptor regulates the production of multiple lymphokines, including interleukin 2 (IL-2), by activation of a signal transduction pathway that is poorly understood. Here we show that ligation of CD28 by a monoclonal antibody (mAb) or by a natural ligand, B7/BB1, induces protein tyrosine phosphorylation that is distinct from T cell receptor (TCR)-induced tyrosine phosphorylation. CD28-induced protein tyrosine phosphorylation was greatly enhanced in cells that had been preactivated by ligation of the TCR, or by pretreatment with phorbol esters. Rapid and prolonged tyrosine phosphorylation of a single substrate, pp100, was induced in T cells after interaction with B7/BB1 presented on transfected Chinese hamster ovary (CHO) cells. Anti-B7 mAb inhibited B7/BB1 receptor-induced tyrosine phosphorylation, indicating that B7-CD28 interaction was required. CD28-induced tyrosine phosphorylation was independent of the TCR because it occurred in a variant of the Jurkat T cell line that does not express the TCR. Herbimycin A, a protein tyrosine kinase inhibitor, could prevent CD28-induced tyrosine phosphorylation and CD28-induced IL-2 production in normal T cells. The simultaneous crosslinking of CD28 and CD45, a tyrosine phosphatase, could prevent tyrosine phosphorylation of pp100. These results suggest that specific tyrosine phosphorylation, particularly of pp100, occurs directly as a result of CD28 ligand binding and is involved in transducing the signal delivered through CD28 by accessory cells that express the B7/BB1 receptor. Thus, this particular form of signal transduction may be relevant to lymphokine production and, potentially may provide a means to study the induction of self-tolerance, given the putative role of the costimulatory signal in the induction of T cell activation or anergy.