Although the lipid kinase phosphatidylinositol 3-kinase (PI-3K) binds at high levels to the cytoplasmic tail of CD28, controversy exists regarding its role in CD28 costimulation. Potentially, the kinase could be linked to a signaling cascade or be needed indirectly in events such as receptor endocytosis. Indeed, little is known regarding both the fate of CD28 following receptor ligation and the events that control the process. In this study, we help to resolve this issue by providing evidence that PI-3K plays a role in regulating CD28 endocytosis. We show that approximately 25 to 35% of wild-type CD28 becomes endocytosed following Ab binding (t1/2 = 10 min), followed by segregation into two pools; one pool is destined for degradation in lysosomal compartments and is blocked by chloroquine, and another pool that is recycled to the cell surface (t1/2 = 2.5 h). Recycling of CD28 could have an important impact on CD80/86-mediated costimulation by replenishing functionally active receptors on the cell surface. Several findings implicate PI-3K in the control of endocytosis. Modulation experiments indicate that CD28-PI-3K complexes are preferentially endocytosed, and mutations that alter PI-3K binding concordantly affect the efficacy of endocytosis. Importantly, mutations that inhibit receptor internalization also block cosignaling. Therefore, previous results documenting a requirement for PI-3K may be explained by a blockage of receptor internalization.