Interactions between B and CD4+ T cells are central to the pathogenesis of retrovirus-induced murine acquired immune deficiency virus (MAIDS). Prompted by previous work showing that treatment with cytotoxic T lymphocyte antigen 4 immunoglobulin (CTLA4Ig) partly inhibited the disease, we studied the course of infection in mice deficient for CD28-B7 interactions (mCTLA4-Hgamma1 transgenic mice). Despite a relative viral load identical to that of non-transgenic mice, the transgenic mice did not develop any of the major MAIDS symptoms (i.e. lymphoproliferation and immune anergy). The mCTLA4-Hgamma1 did not however, completely inhibit B-cell activation as indicated by a slight hypergammaglobulinaemia and microscopic blastic transformation. Absence of MAIDS in transgenic mice was associated with much lower levels of both interleukin-4 and interferon-gamma transcripts following viral infection. These results support the theory that the CD28/B7 costimulatory pathway is a critical determinant to MAIDS development.