CD4 T helper precursor cells mature along two alternative pathways, Thl and Th2. Here we show that these pathways are differentially activated by two costimulatory molecules, B7-1 and B7-2. Using anti-B7 antibodies, this developmental step was manipulated both in vitro and in vivo in experimental allergic encephalomyelitis (EAE). Anti-B7-1 reduced the incidence of disease while anti-B7-2 increased disease severity. Neither antibody affected overall T cell induction but rather altered cytokine profile. Administration of anti-B7-1 at immunization resulted in predominant generation of Th2 clones whose transfer both prevented induction of EAE and abrogated established disease. Since cotreatment with anti-lL-4 antibody prevented disease amelioration, costim ulatory molecules may directly affect initial cytokine secretion. Thus, interaction of B7-1 and B7-2 with shared counterreceptors CD28 and CTLA-4 results in very different outcomes in clinical disease by influencing commitment of precursors to a Thl or Th2 lineage.