CD26 is a T-cell costimulatory molecule with dipeptidyl peptidase IV (DPPIV) activity in its extracellular region. We previously reported that recombinant soluble CD26 enhances peripheral blood T-cell proliferation induced by the recall antigen tetanus toxoid (TT). Recently, we demonstrated that CD26 binds caveolin-1 on antigen-presenting cell (APC), and that residues 201-211 of CD26 along with the serine catalytic site at residue 630, which constitute a pocket structure of CD26/DPPIV, contribute to binding to caveolin-1 scaffolding domain. In addition, following CD26-caveolin-1 interaction on TT-loaded monocytes, caveolin-1 is phosphorylated, with linkage to NF-kappaB activation, followed by upregulation of CD86. Finally, reduced caveolin-1 expression on APC inhibits CD26-mediated CD86 upregulation and abrogates CD26 effect on TT-induced T-cell proliferation, and immunohistochemical studies revealed an infiltration of CD26+ T cells in the sub-lining region of rheumatoid synovium and high expression of caveolin-1 in the increased vasculature and synoviocytes of the rheumatoid synovium. Taken together, these results strongly suggest that CD26-cavolin-1 interaction plays a role in the upregulation of CD86 on TT-loaded APC and subsequent engagement with CD28 on T cells, leading to antigen-specific T-cell activation such as the T-cell-mediated antigen-specific response in rheumatoid arthritis.