Abstract T-cell activation is a multistep process requiring T-cell receptor engagement by peptide–MHC complexes (Signal 1) coupled with CD28-mediated costimulation (Signal 2). Tumors typically lack expression of CD28 ligands, so tumor-specific Signal 1 (e.g., neoepitope presentation) without costimulation may be ineffective or even induce T-cell anergy. We designed the bispecific antibody XmAb808 to co-engage the tumor-associated antigen B7-H3 with CD28 to promote T-cell costimulation within the tumor microenvironment. XmAb808 costimulation was measured by its ability to activate and expand T cells and enhance T cell–mediated cancer cell killing in cocultures of human peripheral blood mononuclear cells and cancer cells and in mice engrafted with human peripheral blood mononuclear cells and tumor xenografts. XmAb808 avidly bound cancer cells and stimulated IL2 and IFNγ secretion from T cells cocultured with cancer cells engineered to deliver Signal 1 to T cells via a surface-expressed anti-CD3 antibody. XmAb808 enhanced expression of the antiapoptotic factor Bcl-xL and CD25, promoting survival and IL2-dependent expansion of T cells coupled with increased T cell–mediated cytotoxicity in vitro. XmAb808 combined with an EpCAM×CD3 bispecific antibody to enhance target cell killing through IL2-dependent expansion of CD25+ T cells. This combination also suppressed pancreatic tumor xenograft growth in mice. Furthermore, XmAb808 combined with an anti–programmed cell death protein 1 antibody to suppress breast tumor xenograft growth in mice. XmAb808 as monotherapy and in combination with an anti–programmed cell death protein 1 antibody is currently in clinical development in patients with advanced solid tumors. Our results suggest that XmAb808 may also combine with tumor antigen–targeted anti-CD3 (Signal 1) T-cell engagers.