The YMNM motif that exists in the CD28 cytoplasmic domain is known as a binding site for phosphatidylinositol 3-kinase and Grb-2 and is considered to be important for CD28-mediated costimulation, To address the role of the YMNM motif in CD28 cosignaling in primary T cells, we generated transgenic mice on a CD28 null background that express a CD28 mutant lacking binding ability to phosphatidylinositol 3-kinase and Grb-2, After anti-CD3 and anti-CD28 Ab stimulation in vitro, the initial proliferative response and IL-2 secretion in CD28 Y189F transgenic T cells were severely compromised, while later responses were intact. In contrast to anti-CD3 and anti-CD28 Ab stimulation, PMA and anti-CD28 Ab stimulation failed to induce IL-2 production from CD28 Y189F transgenic T cells at any time point. Using the graft-vs-host reaction system, we assessed the role of the YMNM motif for CD28-mediated costimulation in vivo and found that CD28 Y189F transgenic spleen cells failed to engraft and could not induce acute graft-vs-host reaction. Together, these results suggest that the membrane-proximal tyrosine of CD28 is required for costimulation in vivo. Furthermore, these results indicate that the results from in vitro assays of CD28-mediated costimulation may not always correlate with T cell activation in vivo.