We examined the role of the CD28/B7 interaction in regulation of NK cell activity. Cells transfected with B7 enhanced IL-12-induced production of IFN-gamma by IL-2-activated, CD28+ NK cells, but not by resting CD28- NK cells. The ability of B7 transfectants to enhance NK cell production of IFN-gamma was dependent on the intracellular adhesion molecule-1/LFA-1 interaction and could be inhibited by TGF-beta, but not IL-10. Since IL-12-induced production of IFN-gamma by NK cells is associated with resistance to certain infections, we examined whether the CD28/B7 interaction regulated NK cell responses during infection. Infection of SCID mice with Toxoplasma gondii resulted in the appearance of a population of CD28+ NK cells, NK cell production of IFN-gamma, and increased NK cell cytolytic activity. Administration of CTLA4-Ig to SCID mice infected with T. gondii inhibited these latter two effects and resulted in a significant increase in parasite burden. The stimulus for CD28 expression by NK cells in SCID mice infected with T. gondii appeared to be independent of IL-2. However, mRNA for IL-15, a cytokine with properties similar to those of IL-2, was detected in tissues of SCID mice infected with T. gondii. In vitro experiments demonstrated that IL-15 could stimulate resting NK cells to express functionally active CD28 as well as enhance the production of IFN-gamma by SCID splenocytes stimulated with T. gondii. Together our data demonstrate that the interaction of CD28+ NK cells with B7 regulates NK cell production of IFN-gamma associated with resistance to infection and that IL-15 may be involved in these events.