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CTLA-4 gene constructs were designed to express CTLA-4 exclusively in the endoplasmic reticulum (ER). Four different CTLA-4 gene constructs were transfected into HEK 293 (human embryonic kidney) and A20 (Balb/c mouse B lymphoma) cells. All constructs contained an ER retention signal and coded for CTLA-4 expression in the ER. One of the constructs, which contained the membrane part of CTLA-4, coded for an expression both on the cell surface and in the ER. Three of the expressed CTLA-4 types (including the ER-membrane-expressed form) caused a reduced surface expression of B7 in the A20 cells. Only constructs which allow dimerization of CTLA-4 showed this effect. It is assumed that intracellular CTLA-4 bound B7 and inhibited therefore the transport of B7 to the surface. The binding obviously caused also an enhanced degradation of the complexes because both proteins showed a low concentration in the transfected cell lines. CTLA-4-transfected and B7-reduced A20 cells showed a diminished costimulating activity upon T cells. This was demonstrated by a reduced proliferation of T cells from ovalbumin-immunized Balb/c mice, incubated with ovalbumin peptide-primed CTLA-4-transfected A20 cells.