Activation of T cells involves multiple receptor-ligand interactions between T cells and antigen presenting cells (APC). At least two signals are required for T-cell activation: Signal 1 results from recognition of MHC/peptide complexes on the APC by cell surface T-cell receptors (TCR), whereas Signal 2 is induced by the interactions of co-stimulatory molecules on APC with their complementary receptors on T cells. This review focuses on our attempts to understand these various signals in a model system involving the 2C TCR. The structural basis of Signal 1 was investigated by determining the crystal structure of 2C TCR alone and in complex with MHC/peptide. Analysis of these structures has provided some basic rules for how TCR and MHC/peptide interact; however, the critical question of how this interaction transduces Signal 1 to T cells remains unclear. The effects of Signal 1 and Signal 2 on T-cell activation were examined with naive T cells from the 2C TCR transgenic mice, defined peptides as antigen and transfected Drosophila cells as APC. The results suggest that, except under extreme conditions, Signal 1 alone is unable to activate naive CD8 T cells despite the induction of marked TCR downregulation. Either B7 or intercellular adhesion molecule (ICAM)-1 can provide the second signal for CD8 T-cell activation. However, especially at low MHC/peptide densities, optimal activation and differentiation of CD8 T cells required interaction with both B7 and ICAM-1 on the same APC. Thus, the data suggest that at least two qualitatively different co-stimulation signals are required for full activation of CD8 T cells under physiological conditions.