Abstract: Nucleic acids encoding B7-1 and B7-2 molecules which bind CD28 or CTLA4 are described. These structural forms correspond to naturally-occurring alternatively spliced forms comprising cytoplasmic and signal peptide domains of T cell costimulatory molecules or variants thereof which can be produced by standard recombinant DNA techniques. These T cell costimulatory molecules can be used to identify agents which stimulate the express of alternative forms of costimulatory molecules and to identify components of the signal transduction pathway which results in costimulation of T cells.