Interaction of the CD80 (B7-1) and CD86 (B7-2) molecules on antigen presenting cells with the receptors CD28 and CTLA-4 on T cells generates signals important in the regulation of immune responses. Because this receptor system involves multiple receptor-ligand interactions, determining the function for individual receptors has been difficult. One approach is the use of antibodies and their derivatives with singular specificity as substitute ligands to explore the activities of these molecules. We have constructed recombinant mono- and bi-specific sFv molecules specific for the CD28 receptor that are capable of binding and generating costimulatory signals to activate T cells. We demonstrate that these soluble molecules are capable of higher levels of costimulation than soluble CD80Ig at equivalent concentrations. We also constructed artificial adhesion receptors on the cell surface using two different CD28-specific sFvIgs fused to the CD80 cytoplasmic and transmembrane domains. In this report, we compared costimulation by a soluble bispecific (alpha CD28-alpha L6) single chain sFvIg fusion protein to that generated by L6 antigen positive (L6+) H3347 tumor cells transduced with cell surface expressed forms of alpha CD28 sFv's. We show that the bispecific protein can target potent CD28 costimulatory activity to L6+ tumor cells in vitro. We also show that transfection of the cell surface forms of the two different CD28 sFvIgs into H3347 tumor cells allows them to generate significant costimulatory signals to activated T cells. Finally, we demonstrate that tumor cell presentation of either the soluble bispecific or transduced cell surface sFv generate similar costimulatory effects resulting in T cell activation.