The process by which naive T cells become activated, differentiate into effector cells and ultimately generate long-lived memory cells is dependent upon a number of factors, including the costimulatory signals received by the T cell. To best understand the multiple events involved, it is important to understand the potential contributions by individual signalling proteins using both in vitro and in vivo studies. Here, the potential for costimulation through intercellular adhesion molecule-1 (ICAM-1; CD54), resident on the surface of naive human T cells, to influence differentiation was investigated. Costimulation of naive T cells through ICAM-1 resulted in expansive cell division, high interleukin-2 production, and protection from apoptosis. Prolonged culture led to outgrowth of a subpopulation of cells with a highly differentiated CD45RA– CD11ahi CD27– phenotype. In this respect, costimulation through ICAM-1 was similar to costimulation through CD28 and different from costimulation through leucocyte function-associated antigen-1. The CD45RA– CD11ahi CD27– cells responded to suboptimal stimulation through the T-cell receptor alone with a more robust proliferative response compared with naive cells from the same subject. These cells also secreted higher levels of T helper type 1 cytokines in response to lower levels of stimulation than their naive counterparts. The surface phenotype and more sensitive response characteristics suggest the creation of a memory T-cell subpopulation as a result of costimulation through ICAM-1. Finally, generation of this memory population was the result of specific costimulatory signals, and not merely because of a high number of cell divisions. These data reveal a new role for resident ICAM-1 to influence the differentiation of naive T cells.