CD28 ligation delivers a costimulatory signal important in T cell activation. This study demonstrates that the disruption of the CD28/B7 pathway early in the non-obese diabetic mouse strain, using CD28(-/-) and CTLA4lg transgenic mice, promoted the development and progression of spontaneous autoimmune diabetes. Functional analyses of T cells isolated from GD28-deficient mice demonstrated that the CAD-specific T cells produced enhanced Th1-type cytokines (IL-2 and IFNγ) and diminished Th2-type cytokine, IL-4. Moreover, there was a significant decrease in serum levels of anti-GAD antibodies of the IgG1 isotype consistent with a profound suppression of Th2-type responses in these animals. Thus, the early differentiation of naive diabetogenic T cells into the Th2 subset is dependent upon CD28 signaling and extends our understanding of the importance of Th1/Th2 balance in the regulation of this spontaneous autoimmune disease.