The interaction between CD40 ligand and CD40 is critical for activation of T and B cells in vivo. We have recently demonstrated that this interaction rapidly induces a novel costimulatory activity distinct from B7 and independent of CD28. To study the molecular basis of the costimulatory activity, we have produced a novel monoclonal antibody, TM-1, that binds an 85-kilodalton costimulatory molecule rapidly induced by CD40L. Expression cloning reveals that TM-1 binds CD44H. CD44H expressed on Chinese hamster ovary cells has potent costimulatory activity for clonal expansion of T cells isolated from both wild-type mice and these with a targeted mutation of CD28. Thus, CD44H costimulates T cell proliferation by a CD28-independent mechanism. These results revealed that CD44H is a costimulatory molecule rapidly induced by CD40L.