The B7-family inducible costimulator (ICOS) activates phosphoinositide-3 kinase (PI3K) and augments calcium mobilization triggered by the T-cell receptor (TCR). We surprisingly found that the entire cytoplasmic domain of ICOS is dispensable for its costimulation of calcium mobilization. This costimulatory function relies on the unique transmembrane domain (TMD) of ICOS, which promotes association with the tyrosine kinase Lck. TMD-enabled Lck association is also required for p85 recruitment to ICOS and subsequent PI3K activation, and Lck underlies both the bystander and costimulatory signaling activity of ICOS. TMD-replaced ICOS, even with an intact cytoplasmic domain, fails to support TFH development or GC formation in vivo. When transplanted onto a chimeric antigen receptor (CAR), the ICOS TMD enhances interactions between T cells and antigen-presenting target cells. Therefore, by revealing an unexpected function of the ICOS TMD, our study offers a new perspective for the understanding and potential application of costimulation biology.