Aging and chronic inflammatory syndromes, such as rheumatoid arthritis, are associated with high frequencies of CD4(+)CD28(null) T cells, which are rarely seen in healthy individuals younger than 40 years. Inasmuch as rheumatoid arthritis and aging are also associated with elevated levels of TNF-alpha, we examined whether this proinflammatory cytokine influences CD28 expression. Incubation of T cell lines and clones as well as Jurkat cells with TNF-alpha induced a reduction in the levels of cell surface expression of CD28. This effect of TNF-alpha was reversible; however, continuous culture of CD4(+)CD28(+) T cell clones in TNF-alpha resulted in the appearance of a CD28(null) subset. In reporter gene bioassays, TNF-alpha was found to inhibit the activity of the CD28 minimal promoter. Inactivation of the promoter was accompanied by a marked reduction in DNA-protein complex formation by two DNA sequence motifs corresponding to the transcriptional initiator of the CD28 gene. Indeed, in vitro transcription assays showed that nuclear extracts from TNF-alpha-treated cells failed to activate transcription of DNA templates under the control of a consensus TATA box and the CD28 initiator sequences. In contrast, similar extracts from unstimulated T cells supported transcription. These results demonstrate that TNF-alpha directly influences CD28 gene transcription. We propose that the emergence of CD4(+)CD28(null) T cells in vivo is facilitated by increased production of TNF-alpha.