The B7-1 molecule, expressed on antigen presenting cells (APC), provides a crucial costimulatory signal for T cell activation. Recent studies demonstrate the existence of alternative, non-B7-1 CTLA4 counter-receptors in mice and humans. Here, we describe the molecular cloning and demonstrate costimulatory function of the murine B7-2 (mB7-2) gene. Murine B7-2 cDNA encodes a member of the Ig supergene family that binds CTLA4-Ig and stains with the GL1 but not anti-mB7-1 mAb. Murine B7-2 costimulates the proliferation and interleukin 2 production of CD4+ T cells and this costimulation can be inhibited by either CTLA4-Ig or GL1 mAb. Identification of the B7-2 molecule will permit further manipulation of the B7:CD28/CTLA4 costimulatory pathway which has been shown to be involved in the prevention of tolerance, induction of tumor immunity, and most recently, in the pathogenesis of autoimmunity.