The CD69 (Leu-23) activation Ag is a phosphorylated 28 to 32-kDa disulfide-linked homodimer that is rapidly induced after lymphocyte activation. CD69 is not present on the surface of peripheral blood resting T cells, but is constitutively expressed by CD3bright thymocytes. Activation of protein kinase C (PKC) by stimulation of the TCR/CD3 or by phorbol esters directly induces CD69 expression on T cells. In the attempt to elucidate the function of CD69 we investigated the ability of the CD69 glycoprotein to transmit an activation signal. Cross-linking of CD69 by mAb induced a prolonged elevation of intracellular [Ca2+], mostly due to an influx of extracellular Ca2+. This signal alone was unable to effectively activate PKC. When PKC was simultaneously activated by PMA, stimulation of CD69 induced IL-2 and IFN-gamma gene expression, enhancement of CD25 expression, and ultimately IL-2-dependent T cell proliferation. Both CD4+ and CD8+ peripheral T cells responded to CD69-mediated activation. Stimulation of CD69 induced proliferation of thymocytes as well as peripheral T cells, but both required independent PKC activation by PMA. Cyclosporin A, which does not prevent PKC-induced CD69 expression, completely suppressed CD69-induced IL-2 and IFN-gamma gene expression. Although the signal delivered by the CD69 initiates T cell proliferation, it is unable to trigger cytotoxicity programs in CD69+-activated T cells or T cell clones.