CTLA-4 is a lymphocyte cell surface receptor expressed by activated T cells that functions to down-regulate T cell responses induced by TCR and CD28 stimulation. Since CTLA-4 competes with CD28 for binding to the common ligands B7-1 and B7-2, the level of CTLA-4 surface expression is likely to play an important role in its ability to inhibit CD28-dependent T cell activation. The factors that regulate these levels are poorly understood. Recent studies have revealed that following T cell activation, the majority of CTLA-4 is localized intracellularly rather than on the cell surface, and surface CTLA-4 is rapidly reinternalized. In this study, we investigate the molecular mechanism underlying the rapid clearance of CTLA-4 from the cell surface. The data demonstrate that cell surface CTLA-4 is endocytosed into clathrin-coated vesicles even in the absence of ligand. The targeting of CTLA-4 to clathrin-coated vesicles is mediated by the clathrin-associated adaptor complex AP-2. The cytoplasmic domain of CTLA-4 was found to specifically bind to AP50, the medium chain subunit of AP-2 in both yeast two-hybrid and coimmunoprecipitation assays. The interaction requires the peptide sequence 199-GVYVKM-204 in the cytoplasmic tail of CTLA-4. Mutation of the CTLA-4 amino acid residue Y201 abrogates the interaction with AP50, resulting in the accumulation of CTLA-4 at the cell surface. Together these data suggest that the interaction of CTLA-4 with AP50 plays an important role in regulating the cell surface expression of CTLA-4.