A soluble form of cytotoxic T lymphocyte-associated antigen-4 (sCTLA-4) was recently found and shown to possess B7 binding activity. sCTLA-4 is generated by alternatively spliced mRNA. The mRNA encoding sCTLA-4 consists of 3 exons: exon 1 encodes a leader peptide, exon 2 the ligand binding domain, and exon 4 the cytoplasmic tail, but it lacks the transmembrane domain encoded by exon 3. The altered transcript is detected in resting CD4 and CD8 T cells and its expression is inhibited after 24--48 h of activation and returns to the prestimulation level after 72--120 h of activation. Low levels of sCTLA-4 have been detected in normal human serum and increased serum levels have been observed in several autoimmune diseases (e.g. Graves' disease, myasthenia gravis, systemic lupus erythematosus, and systemic sclerosis). The biological significance of increased sCTLA-4 serum level has not been clarified. On one hand, sCTLA-4 may bind B7 expressed on antigen-presenting cells and is thus able to interfere with the B7:CD28-mediated costimulation of T cell responses. On the other hand, sCTLA-4 may also be capable of interfering with B7:CTLA-4 interactions, thereby blocking the negative signal imparted via the full-length form of CTLA-4. This double-edged nature of B7 blocking by sCTLA-4 may result in different outcomes of the clinical course of disease.