Efficient generation of regulatory T cells (T(reg) cells) in the thymus requires CD28 costimulation, but it is not known why. Here, molecular mapping of CD28 costimulation showed that T(reg) cell generation requires a motif that binds the tyrosine kinase Lck, precisely the same motif that is required for CD28 costimulation of interleukin 2 production. Nevertheless, CD28 costimulation provides more than interleukin 2 to developing T(reg) cells, as CD28 costimulation of T cell receptor-signaled double-positive thymocytes induced expression of Foxp3, considered to be the T(reg) 'master gene', as well as GITR and CTLA-4, two proteins expressed on T(reg) cells. Thus, CD28 costimulation directly signals developing thymocytes to express Foxp3 and to initiate the T(reg) cell differentiation program.