Invariant NKT (iNKT) cells are a population of TCRalphabeta-expressing cells that are unique in several respects. In contrast to conventional T cells, iNKT cells are selected in the thymus for recognition of CD1, rather than conventional MHC class I or II, and are selected by CD1-expressing double-positive thymocytes, rather than by the thymic stromal cells responsible for positive selection of conventional T cells. We have probed further the requirements for thymic iNKT cell development and find that these cells are highly sensitive to B7-CD28 costimulatory interactions, as evidenced by the substantially decreased numbers of thymic iNKT cells in CD28 and in B7 knockout mice. In contrast to the requirement for CD1, B7-CD28 signaling does not affect early iNKT cell lineage commitment, but exerts its influence on the subsequent intrathymic expansion and differentiation of iNKT cells. CD28 wild-type/CD28-deficient mixed bone marrow chimeras provided evidence of both cell-autonomous and non-cell-autonomous roles for CD28 during iNKT cell development. Paradoxically, transgenic mice in which thymic expression of B7 is elevated have essentially no measurable thymic iNKT cells. Taken together, these results demonstrate that the unique pathway involved in iNKT cell development is marked by a critical role of B7-CD28 interactions and that disruption or augmentation of this costimulatory interaction has substantial effects on iNKT cell development in the thymus.