Ligation of both the T cell receptor (TCR) and the CD28 receptor is required for full T cell activation to occur. Engagement of the TCR in primary T cells is followed by rapid cAMP production in lipid rafts and activation of the cAMP-protein kinase A (PKA)-Csk pathway inhibiting proximal T cell signaling. However, CD28 stimulation leads to recruitment of a beta-arrestin/phosphodiesterase-4 (PDE4) complex to rafts, resulting in down-regulation of cAMP levels. Thus, the activities of both PKA and PDE4 seem to be important for regulation of TCR-induced signaling and T cell function. This review will focus on the novel mechanism whereby CD28 through PI3K regulates recruitment of a PKB/beta-arrestin/PDE4 complex thereby allowing a complete T cell activation to proceed.