Background. Blockade of T-cell costimulation by local delivery of an adenoviral vector encoding for CTLA-4Ig and systemic administration of the protein are compared in a rat lung allograft model. Methods. Left lungs of Brown Norway rats (RT1n) were transplanted into Lewis (RT11) recipients in four groups of six animals each: 1) no treatment; 2) intrabronchial transduction of donor lung with adenovirus encoding mCTLA-4Ig (adeno-mCTLA-4Ig); 3) intrabronchial transduction with empty adenovirus; and 4) intraperitoneal injection of mCTLA-4Ig. Grading of rejection, mCTLA-4Ig measurement in serum and bronchial washings, RT-PCR for virally encoded transcripts, and immunohistochemistry for mCTLA-4Ig were carried out 4 days later. Results. Intrabronchial transduction with adeno-mCTLA-4Ig resulted in detectable transgene expression in graft tissue and bronchial fluid but not in serum. Significant reduction in rejection grade (from grade 3 to 2) occurred after systemic mCTLA-4Ig but not adeno-mCTLA-4Ig transduction. Conclusion. Local expression of immunomodulatory proteins can be achieved within lung allografts by intrabronchial delivery of adenoviral vector but may not significantly modify acute rejection.