Signaling via the B7:CD28/CTLA4 costimulatory pathway can provide a potent costimulatory signal, which can prevent the induction of anergy. The importance of the B7:CD28/CTLA4 pathway for in vivo tolerance has been illustrated dramatically by studies indicating that CTLA4-Ig can induce long term graft survival and suppress autoimmunity in rodents. B7:CD28/CTLA4 costimulatory pathway blockade may enable a distinctive immunosuppressive strategy, since it would affect only those antigen- specific T cells undergoing activation and not be globally immunosuppressive. However, recent studies, demonstrating both positive and negative signaling through this pathway, indicate that additional insights are needed in order to successfully manipulate this key immunoregulatory pathway pharmacologically. The discovery of a second costimulatory molecule, B7-2, as the major, early activating costimulator in this pathway gives impetus to examining the role of B7-2 in the generation of immune responses in vivo. In this project, we will focus on the in vivo function and the regulation of the expression of the B7-2 costimulatory molecule. The goals of this project are two-fold: (1) We will examine the importance of B7-2 for the generation of immune responses in vivo, by examining the functional consequences of genetically altering B7-2 expression. We have generated mice lacking expression of B7-1 or B7- 2, and transgenic mice that constitutively overexpress B7-1 or B7-2 on B cells. These mice provide a definitive means for determining whether B7-1 and B7-2 have complementary or overlapping functions in vivo. In addition, we are generating mice lacking both B7-1 and B7-2 in order to analyze the in vivo consequences of a more complex inactivation of the 37:CD28/CTLA4 pathway. Studies with CTLA4Ig cannot distinguish the roles of B7-1 and B7- 2. (2) We will examine the molecular basis for the regulation of B7-2 gene expression in antigen presenting cells (APCs). Regulated expression of costimulatory molecules is critical to the proper functioning of the immune system. B7-2 gene expression is restricted to APCs, can be inducible or constitutive, depending upon the APC population, and is regulated in both a positive and negative fashion by cytokines and other stimuli. As a first step to define the molecular basis for the highly regulated expression of B7-2, we have characterized the genomic organization of murine B7-2 and transcripts expressed by this locus, and found that the murine B7-2 locus can lead to the expression of 5 distinct transcripts, which differ in their expression in distinct types of APCs. In this aim we will build upon these studies to perform an initial analysis of the transcriptional regulation of B7-2. Taken together, these studies should provide much needed insights into the recently discovered complexities in the B7:CD28/CTLA4 costimulatory pathway, enabling rational pharmacological manipulation of this important immunoregulatory pathway.