T cell activation is tightly regulated by both stimulatory and inhibitory co-receptors and has been a focus in the development of interventions for managing cancer or autoimmune diseases. Targeting the inhibitory co-receptors programmed cell death 1 (PD-1) and cytotoxic T-lymphocyte-associated protein 4 (CTLA-4) has successfully eradicated tumors but induced immune-related adverse-events in human and mice. The beneficial and adverse effects of targeting these co-receptors highlight their importance in cancer immunity and also autoimmunity. Although therapeutic potencies of other inhibitory co-receptors are under extensive investigation, their inhibitory mechanisms and their functional differences are not well understood. Here we analyzed the inhibitory mechanisms of lymphocyte activation gene-3 (LAG-3), another inhibitory co-receptor by using an in vitro T cell activation system and a high-affinity anti-LAG-3 Ab that strongly interferes with the binding of LAG-3 to its ligand. We found that the expression level of LAG-3 strongly correlates with the inhibitory function of LAG-3, suggesting that LAG-3 functions as a rheostat rather than as a breaker of T cell activation. By evaluating the inhibitory capacities of various LAG-3 variants relative to their expression levels, we found that LAG-3 transduces two independent inhibitory signals through an FxxL motif in the membrane-proximal region and the C-terminal EX repeat. These motifs have not been previously reported for inhibitory co-receptors, suggesting that LAG-3 inhibits T cell activation through a non-redundant inhibitory mechanisms along with the other inhibitory co-receptors. Our findings provide a rationale for combinatorial targeting of LAG-3 and the other inhibitory co-receptors to improve cancer immunotherapy.