The generation of an antigen-specific T-cell response requires that the T lymphocyte receive two signals from the antigen presenting cell. The specificity of this response is provided by antigen presented to the T lymphocyte and involves stimulation of the T lymphocyte via the T-cell receptor (TCR)/CD3 complex. The second, or costimulatory signal, can be provided by ligation of the B-lymphocyte activation antigens B7-1 (CD80) and B7.2 (CD86) to TCR antigen CD28. The cDNAs for both CD80 and CD86 have been isolated and are predicted to encode type 1 membrane proteins of the immunoglobulin (Ig) superfamily. The predicted protein is composed of a signal peptide followed by two Ig-like extracellular domains, a transmembrane domain, and a cytoplasmic tail. Here we report that the genomic organization of CD86 reflects its functional structure, and is similar to that found for CD80. The gene is composed of eight exons which span more than 22 kilobases. The predicted protein functional domains of signal peptide, extracellular IgV- and IgC-like regions, and transmembrane domain coincide with the genomic structure. Two independent sequences had been reported for CD86 cDNA which differed in their 5'untranslated (UT) regions. We find CD86 exons 1 and 2 correspond to these alternate 5'UT sequences. Splicing of exon 1 or 2 with the signal peptide encoding exon 3 would produce mRNA transcripts complementary to the reported cDNA clones. Exons 4 and 5 correspond to IgV- and IgC-like extracellular domains, respectively. Exon 6 encodes the transmembrane region and beginning of the cytoplasmic tail. Exons 7 and 8 encode the remainder of the cytoplasmic tail and 3'UT sequences.