Mounting an appropriate immune response depends on the careful regulation of lymphocyte activation. To this end, lymphocytes require two independent signals to become fully activated. The first, an antigen-specific signal is sent via the unique antigen receptor: T cell receptor (TCR) on T cells or surface Ig on B cells. The second signal, termed costimulation, is independent of the antigen receptor and is critical to allow full activation, sustain cell proliferation, prevent anergy and/or apoptosis, induce differentiation to effector and memory status, and allow cell-cell cooperation. Costimulation is in turn regulated by the expression of inhibitory receptors upon lymphocyte activation. Here we will consider the growing list of costimulatory and inhibitory molecules, with emphasis on signaling events they initiate. Potentially complex patterns of regulation implied by the variety of receptor/ligand pairs and their differential expression patterns will also be discussed.