CTLA-4 is an activation-induced, homodimeric inhibitory receptor in T cells. Recent crystallographic reports have suggested that it may form lattice-like arrays on the cell surface upon binding B7. 1/B7. 2 (CD80, CD86) molecules. To test the biological relevance of these CTLA-4-B7 lattices, we introduced a C122A point mutation in human CTLA-4, because this residue was shown to be essential for dimerization in solution. Surprisingly, we found that up to 35% of C122A CTLA-4 dimerized in human T lymphocytes. Moreover, C122A CTLA-4 partitioned within lipid rafts, colocalized with the TCR in the immunological synapse, and inhibited T cell activation. C122-independent dimerization of CTLA-4 involved N-glycosylation, because further mutation of the N78 and N110 glycosylation sites abrogated dimerization. Despite being monomeric, the N78A/N110A/C122A triple mutant CTLA-4 localized in the immunological synapse and inhibited T cell activation. Such functionality correlated with B7-induced dimerization of these mutant molecules. Based on these data, we propose a model of hierarchical regulation of CTLA-4 oligomerization by which B7 binding ultimately determines the formation of dimer-dependent CTLA-4 lattices that may be necessary for triggering B7-dependent T cell inactivation.