According to the "two-step model," the intrathymic generation of CD4(+) regulatory T (T-reg) cells segregates into a first, T cell receptor (TCR)-driven phase and a second, cytokine-dependent phase. The initial TCR stimulus gives rise to a CD25(+)Foxp3(-) developmental intermediate. These precursors subsequently require cytokine signaling to establish the mature CD25(+)Foxp3(+) T-reg cell phenotype. In addition, costimulation via CD28/B7 (CD80/86) axis is important for the generation of a T-reg cell repertoire of normal size. Recent data suggest that CD28 or B7 deficient mice lack CD25(+)Foxp3(-) T-reg cell progenitors. However, these data leave open whether costimulation is also required at subsequent stages of T-reg differentiation. Also, the fate of ``presumptive'' T-reg cells carrying a permissive TCR specificity in the absence of costimulation remains to be established. Here, we have used a previously described TCR transgenic model of agonist-driven T-reg differentiation in order to address these issues. Intrathymic adoptive transfer of T-reg precursors indicated that costimulation is dispensable once the intermediate CD25(+)Foxp3(-) stage has been reached. Furthermore, lack of costimulation led to the physical loss of presumptive T-reg cells rather than their escape from central tolerance and differentiation into the conventional CD4(+) T cell lineage. Our findings suggest that CD28 signaling does not primarily operate through enhancing the TCR signal strength in order to pass the threshold intensity required to initiate T-reg cell specification. Instead, costimulation seems to deliver unique and qualitatively distinct signals that coordinately foster the developmental progression of T-reg precursors and prevent their negative selection.