Cbl-b negatively regulates CD28-dependent T cell activation. In this report, we tested the hypothesis that CD28 and CTLA-4 have opposite roles in tuning T cell activation threshold by controlling the levels of Cbl-b protein expression. We demonstrate that CD28 costimulation potentiates TCR-induced Cbl-b degradation, whereas CTLA-4-B7 interaction is required for Cbl-b re-expression. In support of this finding, Cbl-b expression in CTLA-4 knockout (KO) T cells is significantly reduced, and treating CTLA-4KO mice with human CTLA-4Ig to block CD28-B7 interaction restores Cbl-b expression on T cells. Furthermore, CD28 and CTLA-4 costimulatory effects are compromised in Cbl-bKO T cells. These observations indicate that CD28 and CTLA-4 tightly regulate Cbl-b expression which is critical for establishing the threshold for T cell activation.