It has been extensively shown that when T cells are co-stimulated with B7-CD28 interaction, a strong proliferative as well as cytolytic T cell response can be induced. In contrast, there exists only indirect evidence that the B7-CD28 interaction is of importance for the induction of T cell helper functions in B cell responses. Here we have used mouse fibroblasts transfected with the human Fc gamma receptor type II and human B7 to address this issue. We found that T cells, when activated through the T cell receptor (TcR)/CD3 complex with monoclonal antibodies and co-stimulated by B7-CD28 interaction, can provide efficient help for the induction of both IgM and IgG production by resting B cells. This helper activity is, at least in part, mediated by the interaction between the CD40 ligand on the T cells and CD40 on the B cells. We also demonstrate that more than one signal to the T cell is required for the induction of the CD40 ligand, one being delivered through the TcR/CD3 complex and the second by ligation of CD28 with the B7 molecule. In addition to the induction of cognate T helper function, we provide evidence that co-stimulation of T cells with B7-CD28 interaction can result in the secretion of both Th1- and Th2-type lymphokines.