The CD26 antigen, one of the major costimulatory molecules in T cell activation, was shown to possess dipeptidyl peptidase IV (DPP IV) activity. Previously, we demonstrated that immunosuppressed kidney transplant patients exhibit lower DPP IV serum activity as compared with healthy individuals. In the present study, we analyzed the role of CD26/DPP IV in the immune cascade triggered by organ transplantation and leading to acute rejection of cardiac allografts in rat recipients. Transplantation of hearts from (Lewis × Brown Norway)F1donors into Lewis hosts resulted in an early (24 hr) increase in cellular CD26 expression, followed by a rise in DPP IV serum activity, which peaked at day 6, i.e., before the time of actual graft loss. Specific targeting of DPP IV activity with a novel, low-molecular-weight inhibitor of the diphenyl-phosphonate group (prodipine) abrogated acute rejection and prolonged cardiac allograft survival to 14.0±0.9 days (P<0.0001). Prodipine treatment prevented the early peak of cellular CD26 expression and thoroughly suppressed systemic DPP IV activity. The inhibition of DPP IV was associated with severely impaired host cytotoxic T lymphocyte responses in vitro. These results demonstrate the role of CD26/DPP IV in alloantigen-mediated immune regulation in vivo and provide the first direct evidence that CD26/DPP IV plays an important role in the mechanism of allograft rejection. The model of targeting CD26/DPP IV may reveal essential interactions on the level of costimulatory alternate T cell activation pathways, allowing a more subtle approach for more selective immunosuppression in transplant recipients.