CD26 binds to caveolin-1 in antigen-presenting cells (APC), and that ligation of CD26 by caveolin-1 induces T cell proliferation in a TCR/CD3-dependent manner. We report herein the effects of CD26-caveolin-1 costimulatory blockade by fusion protein caveolin-1-Ig (Cav-1g). Soluble Cav-Ig inhibits T cell proliferation and cytokine production in response to recall antigen, or allogeneic APC. Our data hence suggest that blocking of CD26-associated signaling by soluble Cav-Ig may be an effective approach as immunosuppressive therapy. (C) 2009 Elsevier Inc. All rights reserved.