The role of PI3K in T cell activation and costimulation has been controversial. We previously reported that a kinase-inactivating mutation (D910A) in the p110δ isoform of PI3K results in normal T cell development, but impaired TCR-stimulated cell proliferation in vitro. This proliferative defect can be overcome by providing CD28 costimulation, which raises the question as to whether p110δ activity plays a role in T cell activation in vivo, which occurs primarily in the context of costimulation. In this study, we show that the PI3K signaling pathway in CD28-costimulated p110δ D910A/D910A T cells is impaired, but that ERK phosphorylation and NF-κB nuclear translocation are unaffected. Under in vitro conditions of physiological Ag presentation and costimulation, p110δ D910A/D910A T cells showed normal survival, but underwent fewer divisions. Differentiation along the Th1 and Th2 lineages was impaired in p110δ D910A/D910A T cells and could not be rescued by exogenous cytokines in vitro. Adoptive transfer and immunization experiments in mice revealed that clonal expansion and differentiation in response to Ag and physiological costimulation were also compromised. Thus, p110δ contributes significantly to Th cell expansion and differentiation in vitro and in vivo, also in the context of CD28 costimulation.