Lymphocyte costimulation plays a central role in immunology, inflammation, and immunotherapy. The inducible T cell costimulator (ICOS) is expressed on T cells following peptide: MHC engagement with CD28 costimulation. The interaction of ICOS with its sole ligand, the inducible T cell costimulatory ligand (ICOSL; also known as B7-related protein-1), triggers a number of key activities of T cells including differentiation and cytokine production. Suppression of T cell activation can be achieved by blocking this interaction and has been shown to be an effective means of ameliorating disease in models of autoimmunity. In this study, we isolated specific anti-ICOSL new antigen receptor domains from a synthetic phage display library and demonstrated their ability to block the ICOS/ICOSL interaction and inhibit T cell proliferation. Anti-mouse ICOSL domains, considered here as surrogates for the use of anti-human ICOSL domains in patient therapy, were tested for efficacy in a collagen-induced mouse model of rheumatoid arthritis where they significantly decreased the inflammation of joints and delayed and reduced overall disease progression and severity.