The T cell protein cytotoxic T lymphocyte antigen 4 (CTLA4) was identified as a crucial negative regulator of the immune system over 15 years ago, but its mechanisms of action are still under debate. It has long been suggested that CTLA4 transmits an inhibitory signal to the cells that express it. However, not all the available data fit with a cell-intrinsic function for CTLA4, and other studies have suggested that CTLA4 functions in a T cell-extrinsic manner. Here, we discuss the data for and against the T cell-intrinsic and -extrinsic functions of CTLA4.