T cell surface receptors CD28 and CTLA-4 are homologous members of the immunoglobulin superfamily (IgSF), each comprising a single V-like extracellular domain. CD28 and CTLA-4 bind to the B7-1 and B7-2 counter-receptors on antigen presenting cells (APCs), thereby triggering a costimulatory pathway important for optimal T cell activation in vitro and in vivo. Soluble forms of CD28 and CTLA-4 in which the V-like extracellular domains were fused to Ig constant domains (CD28Ig and CTLA4Ig), have been used to study their interactions with B7-1 and B7-2, with CTLA4Ig binding B7-1 more strongly than CD28Ig (approximately 20-fold higher avidity). We have now, by site-specific and homologue mutagenesis, identified regions in CTLA4Ig important for strong binding to B7-1. A hexapeptide motif (MYPPPY) in the complementarity determining region 3 (CDR3)-like region is fully conserved in all CD28 and CTLA-4 family members. Alanine scanning mutagenesis through the motif in CTLA4Ig and at selected residues in CD28Ig reduced or abolished binding to B7-1. Chimeric molecules HS4, HS4-A, and HS4-B were constructed in which CDR3-like regions of CTLA-4, COOH-terminally extended to include nonconserved residues, were grafted onto CD28Ig. These homologue mutants showed stronger binding to B7-1 than did CD28Ig. Grafting of the CDR1-like region of CTLA-4, which is not conserved in CD28 and is predicted to be spatially adjacent to CDR3, into HS4 and HS4-A, resulted in chimeric molecules (HS7 and HS8) which bound B7-1 even better. Inclusion of the CDR2-like domain of CTLA-4 into HS7 and HS8 did not further increase binding. Thus, the MYPPPY motifs of CTLA4Ig and CD28Ig are important for their binding to B7-1, but the increased strength of this binding by CTLA4Ig is mediated by nonconserved residues in the CDR1- and CDR3-analogous regions.