Rejection of ectopic heart transplants expressing OVA requires OVA-specific CD4 and CD8 T cells. In the absence of CD4 T cells, OVA-specific CD8 T cells proliferate and migrate to the graft, but fail to develop cytolytic functions. With CD4 T cells present, clonal expansion of the CD8 T cells is only marginally increased but the cells now develop effector functions and mediate rapid graft rejection. In the presence of CD4 T cells, Ag and B7 levels do not increase on dendritic cells but IL-12 production is up-regulated, and this requires CD154 expression on the CD4 T cells. OVA-specific CD8 T cells lacking the IL-12 receptor fail to differentiate or mediate graft rejection even when CD4 T cells are present. Thus, CD4 T cells condition dendritic cells by inducing the production of IL-12, which is needed as the "third signal" for CD8 T cell differentiation and avoidance of tolerance.